Sources Of Innovation

A book by EricVonHippel about innovation in industry. In it, he discusses the fact that users are responsible for the overwhelming majority of innovations.

ISBN 0195094220

Incidentally, anyone who thinks that PatentsAreEvil is completely right. Not because they suppress innovation but precisely because they don't. Patents are totally ineffective at preventing others from exploiting innovators in every industry save the pharmaceutical and chemical industries. In general, the story goes something like this.

The only reason firms seek patents is to engage in defensive patenting against other firms that might sue them. This is why patents are so important to firms and also why the patent system provides negative value to innovators. The only reason firms threaten to sue other firms for breach of patent is to seek a cross-licensing deal with the other firm and so neutralize the threat against themselves. And patent sets are always cross-licensed too, which is why everyone simply ignores infringement.

Patents are only effective in the pharmaceutical industry because they're unusually strong. A single patent can easily cover literally millions of molecules whose properties are almost totally unknown. It need only list one whose properties are known and drag in any "analogs" that may or may not have the same properties.

Another reason why patents are effective in pharmaceutics is that the state of the art is so poor. Since nobody knows why the molecule works in the first place, it's not possible to just design a replacement to achieve the same effect.

In any case, if patents were simply nullified for all industries other than the chemical industry, the only people to suffer would be patent lawyers.