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Are patents stifling innovation in mobile devices?

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I cannot understand any of this "scarcity" talk. Scarcity has nothing to do with anything in this field, except the prices of things after the fact.

I don't subscribe to GreedyCap's explanation of how scarcity is relevant to this in his last three posts. I just meant not scarce ideas the way you meant "obvious to a person having ordinary skill in the art". I shall from now on just use your terminology.

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Scarcity is not the same as "not in my hand" or even "out of reach".

Scarcity is a concept denoting the relationship between human needs and wants and available resources - specifically that resources are finite while human wants are unlimited. Grasping this concept is essential to all material value pursuits. Scarcity one of the basic premises explored and formalized by the field of economics.

Scarcity exists when the demand for a good is greater than the supply.

This is a common laymen's confusion about economics. The economic meaning of scarcity is the same as the definition above - that material values are limited whereas human wants are not. The idea of demand being greater than supply is also a common confusion, since there is a market-clearing price for any valuation, and so demand can only differ from the supply in the presence of coercive intervention.

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Scarcity is a concept denoting the relationship between human needs and wants and available resources - specifically that resources are finite while human wants are unlimited. Grasping this concept is essential to all material value pursuits. Scarcity one of the basic premises explored and formalized by the field of economics.

This is a common laymen's confusion about economics. The economic meaning of scarcity is the same as the definition above - that material values are limited whereas human wants are not. The idea of demand being greater than supply is also a common confusion, since there is a market-clearing price for any valuation, and so demand can only differ from the supply in the presence of coercive intervention.

Wait a minute.

A: the meaning of scarcity is "material values are limited whereas human wants are not. "

B: Therefore supply is always less than demand.

C: Equivalently, demand is always greater than supply.

D: Scarcity exists when the demand for a good is greater than the supply.

Please spell out for this layman how D contradicts A.

The only difference at all between my formulation and yours is that I do not concede that scarcity always exists everywhere for all goods. There are cases of worthless goods for which there is no demand (garbage), and finite demand for goods in plentiful supply (soft drinks).

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This strikes me as an absurd argument. Nobody believes that toilet paper should be free because it is cheap. However, if somebody did invent a toilet paper tree and then sprinkled the seeds all over the earth, making them as common as weeds, they would have a hard time claiming that I shouldn't be allowed to grow mine because they own the DNA.

Monsanto's genetically engineered and patent protected "RoundUp Ready"™ canola plants sometimes pollinate the fields of farmers who are not Monsanto customers. Monsanto sues them for patent infringement, and wins.

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B: Therefore supply is always less than demand.

C: Equivalently, demand is always greater than supply.

In economics, "demand" means "demonstrated preference to buy." I can claim to value something as $1, but until I actually spend that $1, my valuation is irrelevant.

Ditto for supply - supply is demonstrated preference to sell. In a free market, supply always equals demand.

D: Scarcity exists when the demand for a good is greater than the supply.

No, scarcity is inherent to the definition of an "economic good". An economic good is an object whose consumption increase the utility of the consumer, for which quantity demanded exceeds the quantity supplied at zero price (i.e., it is finite).

Things that are unlimited are not economic goods.

There are cases of worthless goods for which there is no demand (garbage),

In economic terms, garbage is a "bad" - it is a dis-value. In this case, it is garbage removal services which represent the good.

and finite demand for goods in plentiful supply (soft drinks).

"Cheap" is another term laymen get confused about. "Cheap" applies to the lower of two different prices - either between goods or of the same good in different context. Nothing is inherently "cheap" or "expensive" - a Corvette might be expensive to you, but it's cheap compared to a Ferrari, which is cheap compared to a Bugatti.

Edited by GreedyCapitalist
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In economics, ...

Going back to post #25, I asserted property was more fundamental than scarcity. I provided a layman definition of scarcity, and you counter with the technical economic definition of terms using words like "utility" and "price", abstractions unnecessary to reduce the concept property to concretes. You win the battle, lose the war.

I sharpen a stick and tie a feather to it to make it unique. When my work is done I have spear in my hand, I have possession of it. If someone takes my new spear from me with no offered trade, I understand I have been robbed with no great philosophical reflection. I needed the spear as a tool for hunting, but now I cannot hunt. The power to use and dispose of what I possess is a property right, even if I am a primitive with no concept of what right is. The concept of a property right is implicit in the situation described, all of the elements are present. I claim I have reduced the concept of property to concretes, and it is a far shorter path than any possible reduction of scarcity.

edit: As all economic goods are in someone's possession when they are created, they are someone's property. Thus economic goods are an abstraction of property specifically relating to their value with respect to other articles of property and their trade value. The reduction of property is both shorter and fundamental to economics.

Edited by Grames
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Going back to post #25, I asserted property was more fundamental than scarcity.
Under a certain understanding of scarcity. Property is a necessary moral concept because it is necessary for man's existence qua man. That is specifically because the material goods which are metaphysically required for man's survival are not universally and effortlessly available. If goods appeared magically, the concept "property" would lack that link "necessary to man's existence". Property is not axiomatic, it is the concrete expression of morality in the context of the actual world (where goods do not appear magically).
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Under a certain understanding of scarcity.

The economic understanding is the relevant one. The other understanding you point out here is the metaphysical nature of man. It is also true that a lion doesn't have meat appear before him magically, he has to go out and contribute to the hunt. All living things have to achieve their lives by a certain values and means to those values. Yes, values require action but labelling this situation as scarcity adds no insight. My claim that property was more fundamental than scarcity is not a claim that property is axiomatic because I did not have in mind the use of the word scarcity to describe the axiomatic fact that living things must act to achieve their values in order to live.

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This is picking the nits, but the concept of 'property' is axiomatic within the context of the science of economics, since it has to be assumed before any discussion within economics can occur. It's the same with the concepts of 'production', 'good', 'consumption', 'time' and 'trade'. For another example, the concept of 'reason' is not axiomatic within metaphysics (it can be broken down further to the senses, percepts, and concept-formation), but it is axiomatic within the science of epistemology since it has to be assumed prior to any further discussion within epistemology.

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Right, but it is not axiomatic in the broader context of morality.

I agree, though I'm somewhat confused about whether the discussion is on scarcity in the economic sense or the metaphysical sense. In the economic sense, the scarcity of goods is derivative of production (and therefore property), since property has to be in existence before it can be considered scarce. If the other usage of 'scarcity' is what's being discussed, then isn't it just a substitute for 'need'? In the sense that we aren't born with material values and have to produce them gives rise to the 'need' for production, and we're just calling this "scarcity"?

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I agree, though I'm somewhat confused about whether the discussion is on scarcity in the economic sense or the metaphysical sense.

To use your terminology, scarcity is axiomatic in the field of economics, so the definition is the same. I don't think you need the complication of restricting scarcity to property, since potential property (for ex, unexplored oil fields) is scarce as well. Scarcity just means "both material entities and our time are finite, so we can't get everything we want."

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Yes, I am challenging this claim. The assignment of property rights is only justified when the value in question is scarce.

Intellectual property rights only apply to new original inventions - only to creations which did not exist before. By definition the new value created is scarce. If something existed before (abundant or not) - it would not be patentable.

If the value is not scarce, then the pursuit of that value does not restrict anyone else's pursuit of that value, and so it is not necessary to restrict others from pursuing that value.

Property rights are established before economic consideration of scarcity comes into play. It is rooted in the nature of man - in the fact that we survive by the use of our mind. Novel ideas - fruits of individual man's intellectual effort - become embedded in tangible objects for the purpose of being turned into an economic value by which a man sustains his life. Having that right is a necessity of life for a human being. After the right to life it is the second most important right a man has.

The fact that some people may have chosen to create without the purpose of profit is irrelevant to what is right - it is properly their choice to make.

Furthermore, establishing property rights for non-scarce values violates legitimate rights.

Can you explain this further, please?

Let me give an example: the discovery of the principle E=MC^2 represents a value to the original discoverer, and also to other potential users of that principle. However, the application of that principle by others does not detract from the discoverer's own application of that principle, because the principle behind E=MC^2 is a not scarce resource.

Claims directed to a principle per se are not recognized but it is NOT a function of scarcity. What is patentable is the novel practical application of an idea. It is an issue of tangibility and not scarcity. Discoveries without practical application are not patentable subject matter.

When you object to intellectual property rights you are not objecting to the restriction on the use of discoveries in the world nor to the restriction on non-scarce values but against inventor's right of ownership of a particular practical application of an idea.

In such a case, industrialists are investing trillions of dollars to bettering the lives of every human being through mental and physical effort. Do they now have a claim on us because they are improving the air we consume? Should we implement reverse-carbon taxes? I would say no, because air is a non-scarce resource, and your usage of warmer, higher CO2 air does not detract from mine.

Again, this is not an issue of scarcity. An answer lies in there being no un-chosen obligations. On their part and on yours. However if they invent an econimically viable way of turning air into gold - even though air is not scarce - you don't have a claim on their invention.

Thus we are arguing on the criteria for what should be defined as property, not whether property rights ought to be protected.

That is true. I am very much aware that you recognize physical (if you will) property rights - just not intellectual property rights.

Second, while I agree that property rights confer a benefit and an incentive to the holder of the patent, they also impose an enforcement cost and a dis-incentive to potential creators and entrepreneurs.

It is in the interest of every individual inventor for his property rights to be respected - just as it is the case for any other human right. As I mentioned, it does not inhibit the discovery of new applications for ideas. The right of one person stops when the right of another begins. An improvement to somebody's invention would not be possible without his initial invention. You only own what you yourself created which is only the improvement part.

Potential inventors face the risk of spending time on a invention that may already be patented, being second to arrive at the patent office, having their patent overturned, and spending money on patent lawyers, patent searches and the like.

This is a non essential to the issue of rights. Second, such information is freely available.

Either your invention is novel or it is not (and being second means it is not).

Entrepreneurs likewise risk billions of dollars if a product is found to have violated a submarine patent or their patent is overturned
.

There is no guarantee of economic value - only the possibility of turning a new discovery into an economic value. And it is that possibility which I am defending.

My claim is that the criterion usually used to justify intellectual property is incorrect.

Scarcity as a justification for property rights is incorrect. This is a libertarian misconception. Property rights are established before any economic value comes into play.

My purpose is to propose a correct definition of property.

Which is?

The inventor of the good idea can still create a product with his idea and sell it.

An inventor in many cases would only own the first initial item produced and sold. The first pill - which could be easily chemically analyzed and replicated - that is always easy - it is discovering something new which is the hard part. Why would anyone invest in doing so? - it would be much wiser from an economic stand point to wait and copy other's creations. Some people would have still chosen to do so - especially when the initial cost and longevity of a product is relatively low - like it is the case in fasion (intial cost is low, product is relatively inexpensive, and people want something new every season). But in many cases - when the initial cost of time, effort, and money is high - it would simply be unaffordable.

Trade secrets carry an enforcement cost and a risk of discovery - but patents carry a cost too. It is not a priori obvious which is higher, and many firms still chose trade secrets over patents.

When you establish what is morally right based on the requirements for man's survival dictated by his nature, like we did, things like cost of protection of a moral right is irrelevant. You can't afford not to.

Let me provide several examples of situations where the cost of establishing and protecting rights exceeds the benefit:

Contextual protection limitations do not negate the validity of the moral principle itself. To me this is another non essential.

Edited by ~Sophia~
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The concept of scarcity is more basic than that of property.

That is not true. If we needed salt water to survive - living by the ocean would have made this value non-scarce in the context of your life time. Yet you would not have the right to take the salt water I took the effort to carry from the ocean front to my hut even though it is not a scarce value. The effort of bringing it made it MINE and its abundance does not negate that moral fact. I may have chosen not to enforce this right but that is MY choice to make.

The source of property rights is the law of causality. All property and all forms of wealth are produced by man’s mind and labor.

Edited by ~Sophia~
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If material values were not scarce (and some aren't), men could maximize value pursuit without regard as to where they obtained their resources (as is the case with air, for example.)

The reason air or sunlight are not property is not because they are not scarce but because they do not need to be created.

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To use your terminology, scarcity is axiomatic in the field of economics, so the definition is the same. I don't think you need the complication of restricting scarcity to property, since potential property (for ex, unexplored oil fields) is scarce as well. Scarcity just means "both material entities and our time are finite, so we can't get everything we want."

I disagree that scarcity is axiomatic within economics--we're only limited by our capacity for production (our mind, at root). I think Julian Simon addressed the topic of scarcity of resources pretty well in 'The Ultimate Resource', by pointing out that we have no shortage of inputs, but instead are only limited to the extent that our minds are able to translate those inputs into valuable outputs, as well as improve technology and efficiency to increase the yield of these outputs. It seems strange to start the science with what we don't have (infinity minus a few?).

I think if we are to come up with a reasonable idea of "scarce" or a status of "scarcity," I think we have to treat it as derivative or emergent, like the status of "cold" or "warm," instead of as a starting point for economics. Starting with "we can't get everything we want" is deriving a concept based on our whims; it makes us sound like we are perpetually unsuccessful.

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I still maintain that scarcity is the basis of property rights, but I am going to defer further responses until I wrote a more complete explanation of my thinking. I'm going to leave this thread with a thought experiment:

Imagine a community of beings who exist entirely in cyberspace. They have the ability to instantly and infinitely replicate any entity they observe, including entities created by others. In other words, a world with time as the only scarce resource. Furthermore, let's stipulate that the entities they create cannot be modified without their permission, so no coercion is possible. Would the concept of property rights have any meaning or utility to them? Would the benefit of establishing intellectual monopolies (enforced perhaps, by social sanction) outweigh the costs?

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Imagine a community of beings who exist entirely in cyberspace.

Cyberspace is different than the usual case because by putting something up on the web one grants permission to duplicate one's work to anyone coming to one's website, in a limited manner. This is because in order to view the website, one basically copies it onto one's own personal computer; in other words, the ability to view a website is dependent upon the implicit permission to duplicate so that one has a temporary copy of that page on one's personal computer. It is even possible to save entire websites to one's own computer for later viewing off-line. This is different than, say, borrowing a book from the library and copying it entirely so that one has a duplicate of the book in one's possession. In other words, it is implicitly legally permissible to copy the pages one views on the Internet for one's own personal viewing with a browser; however it is not legally permissible to take that copy and reproduce it onto another website in its entirety and call it your own. That is because websites are private property and you are given permission to view it, but you are not given permission to call it your property so that you can do whatever you want to do with it. It would be a violation of copyrights to take someone else's website and put it up somewhere else under a different URL. That is, one does not have permission to take this essay and put it up somewhere else. I own it because I created it, though because I chose to post it here on oo.net, then oo.net has my permission to put it up for others to view, but not to post it anywhere else or to publish it in book form because it is copyrighted by me.

I think the analogy falls apart because in the real world it is possible to copy other people's patents, but it is not legally permissible. And that is the crux of the argument. Yes, the makers of the iPod can readily copy other inventor's patents -- they have the metaphysical ability to do that. Or they might have come up with the next logical step without realizing someone else had already done that and so it is their property, not iPod's property. In this sense, it is like a copyright -- you don't have permission to copy it and use it in another application. There might be something like fair use in inventing, but I'm not sure there is.

In other words, even in Cyberspace, legal copyrights hold, and while you can cut and paste from other websites, it is not legally permissible to do that without the permission of the owner of that website except insofar as fair use is invoked. And as others have pointed out, fair use is not a right but an implicit permission due to making something publicly available.

So, even if it were possible to copy anything one could view out there in reality -- and that is not metaphysically impossible, if we were advanced enough -- permission would still have to be granted to copy other innovator's devices, because it is owned property, and it is property because someone went through the effort to create it.

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I disagree that scarcity is axiomatic within economics--we're only limited by our capacity for production (our mind, at root).

I agree.

Starting with "we can't get everything we want" is deriving a concept based on our whims; it makes us sound like we are perpetually unsuccessful.

It also envisions human interaction ultimately as a zero sum game and thus one human's life in conflict with another.

-----------------

Scarcity as basis of property rights reverses cause and effect. It treats rights as a function

of society's needs rather than as inherent in the individual who lives in society.

But there is another aspect: the ignorance of the role of mental effort in the creation of wealth. According to this view, Hank would be no more entitled to the possible profit from Rearden metal which took him over ten years to develop (or Galt to the profit from his motor) than any person who would wish and have ability to copy it. It ignores the difference in the mental effort required between creating and copying.

Edited by ~Sophia~
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With few exceptions, raw materials in nature do not come in a form that is ready-made for human use. They have to be transformed by some amount of productive work involving thought and action. It is the need for values, the fact that life requires transformation of raw materials into those values, and the fact that the process of creation does not just magically happen but requires time and effort (which limits our capacity for production) - is what makes property rights a practical necessity. This holds true even in case of unlimited natural resources (unlimited input).

Living in a human society is beneficial but only on certain terms. Collective concepts like progression of society or rate of innovation in society are irrelevant to rights. Because rights are not principles devised for the betterment of the collective existence; their purpose is not a non-conflicting solution to scarcity. Rights arise in recognition of human existential requirements serving as barriers against the collective for the purpose of allowing the individual to meet those requirements.

Edited by ~Sophia~
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Whereas a mathematical equation like e=mc(squared) does not need to be "created" (worked)?

This is a discovery - a theoretical knowledge - an identification of a law of nature - and not a creation. But you can copyright the book explaining such discovery and require an acknowledgment of your authorship of it.

When you translate theoretical knowledge into a novel practical application - that is intellectual property.

Edited by ~Sophia~
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When you translate theoretical knowledge into a novel practical application - that is intellectual property.

So, if Michael Jordan discovers a way of applying this theory to his game - so that he can score baskets by "floating" in the air with the ball - is this his intellectual property?

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