Whatever could anything as abstruse as innovation, intellectual property (IP) and patent protection have to do with equity and transportation? Or for that matter, bicycles? Let’s have a look at what the Dutch economist and journalist Mathijs Bouman has to tell us about why you can ride any old bike you care to today. (And why you may not be able to, tomorrow.)
If the bicycle had been an iPhone, no one could have mounted it
In 1885 the British inventor John Kemp Starley, built the first bicycle with two similar-sized wheels and a chain drive. It was an instant hit. The last decade of the 19th century went down in history as the “golden years of the bicycle”.
The rapid introduction of the bike resembles that of television in the sixties, the mobile phone at the end of 20th century, and – more recently – the tablet computer. A brilliant invention sells itself.
But compared to 130 years ago inventors find it more difficult to reach the market. Hordes of patent-waving lawyers stand between inventor and customer. The patent system was supposed to foster innovation, but litigious patent holders have turned it into a force against innovation.
Starley never patented his bicycle. Everyone could replicate and improve the invention. In our time, he would have doubtlessly protected his bike with many patents. Just as a company like Apple guards its iPhone from competitors with as many patents as possible – not just on the product itself but also its use.
Last week in Germany, Apple won a lawsuit it had filed suit against Motorola. Motorola’s smartphones, which run on Google’s Android operating system, violate the Apple’s “slide-to-unlock’-patent. Yes, you read that correctly: unlocking your smartphone by sliding your finger on a touch screen, is ‘technology’ owned by Apple. Previously, Apple won in a similar case against Samsung in a Dutch court.
If Apple had invented the bicycle, the company had patented the concept of “using reverse-phase rotation of both legs on crutches attached to a shaft, to power a bicycle”. Competitor Google would have retaliated by patenting a technology for mounting a bike. Only users of of Google bikes were allowed to “make several stepping motions with the left foot on the left pedal, before swinging the right leg over the saddle an landing the right foot on the right pedal”.
For decades, Google-cyclists were forced to use their bicycles as velocipede. Apple cyclists were forced to ride off from a standstill, which caused many nasty accidents. Only the lawyers profited from this situation. They invoiced thousands of costly hours in courtrooms, where they defended the patents of the companies. Only decades later, when the patents expired, the golden years of the bicycle could finally begin.
The patent suffers from its his own success. Companies use patents to to make competitors life miserable, to cordon off markets and slow down innovation. Costly lawsuits bankrupt small inventors and slow down the innovation.
Specialized companies exist that buy up patents to extort inventors, without ever producing something themselves. Studies show that these opportunistic ‘patent trolls’ cost the economy $ 500 billion over the past twenty years, in attorneys’ fees, severance payments and lost production. Money that could not be invested in innovation and economic growth.
Policy makers are searching for new ways to kick-start the recession-plagued economy. A complete rehash of the patent system is a great candidate. Lobbyists will scream bloody murder. As will the lawyers. But reforming patent law can usher in new golden age for the economy.
* This article is reprinted here with the kind permission of the author. Source: Het Financieele Dagblad. (Thanks to Pascal J.W. van den Noort of Velo Mondial for the heads-up.)
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About the author:
Mathijs Bouman is an economist and journalist in the Netherlands. He writes a weekly column in Het Financieele Dagblad and Z24.nl, and is commentator for RTL-Z, (Dutch business television). Bouman holds a Ph.D in economics from the University of Amsterdam. He blogs at www.mathijsbouman.nl and http://blogs.z24.nl/boumans_blog.
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