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Wednesday, June 27, 2012

Patent Laws Are Destroying Competition

In economics textbooks, students are usually taught by assuming a particular good sold at market is identical in all respects to its competitors.  Of course in the real world, that is not the case - hence why there is no such thing as perfect competition.  Goods are sold in different ways, in different locations, under different brands, with different materials and qualities, etc. 

Patent law, which was created to protect intellectual property seems to have morphed over the decades as our society seems to have become more corporatist than capitalist to be less about protecting true intellectual property and more about stifling competition.  

Take this recent Apple lawsuit against Samsung for allegedly violating some IPad  patents.  Now I'll admit they look the same on the outside - they are both black and rectangular with a glass front.  Last I checked black was not a patentable color, nor was the shape of a rectangle nor was the fact that the front needs to be glass to see the screen.  Having seen both products, while they cursorily look similar, they have different OS's, different feels, different button locations, etc.  It's not as if Samsung took the exact IPad mold and stamped "Samsung" on it instead of "Apple."   

But this kind of litigation happens all the time, and happens more and more.   It stifles competition, erodes product-brand diversity in the market, and keeps prices higher than they otherwise should be for consumers - all to protect the corporate interest of a company like Apple which is flush with cash and simply does not need such protection.  

If we want to get back to being a society with an economic system based on competition rather than corporate power, we need to revise our archaic patent laws to defer towards competition, not protectionism.


Ramanan said...

Samsung claims the design was from the movie 2001 A Space Odyssey.

(Which is fair)

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