I wrote something about IPP(Intellectual Property Patents), a while ago(cf:Why patents suck).This post can be taken as a continuation of that post or can be taken independently.
After mulling over the general undesirability of IPP , it is time to ask what are the various reasons why people/companies patent at all. Some of the reasons are obviously evil, and some are benign and can be classified as ‘self-defense’ . Big companies and small companies patent for different reasons.
1.First, the evil reason is to kill competition and have a monopoly over pricing. It is done to create an artificial exclusivity of the the product. And this in turn slows down the pace of economic evolution.
2.A not so evil reason is to protect oneself. Even if you are a big company, you are always in a danger to be sued by other big companies(and sometimes by smaller companies). So what do you do? Well, here is a small story about what big companies do in that case. Once, there was a farmer who had a dog. He wanted to sell his dog, and priced it at a whopping 20 thousand dollars. There was another farmer who needed a dog but of course did not have that kind of money to pay. So he went to the dog seller and said that he has two cats, and he plans to sell them at 10 thousand dollars each. So how about exchanging two 10K cats with one 20K dog? The farmer happily agreed and later boasted to his neighbors that he sold his dog for 20K. Well, that is precisely what big corps do. They cross license their patents. They say that if you license me with patents A and B, we will license you with our patents C and D. You scratch my balls and I will scratch your ass. Or something like that.
1.The evil reason why small companies patent their product is to singularly profit from them. They are like domain-name squatters. All they do is patent and pounce on anyone who seems to be infringing their patent conditions. The thing is that these kind of companies don’t have any products, for having a product will put them at risk to be counter sued by big companies. If they have products and sue a big corp, the big corp guy will tell them- “Well, yes we infringed your patent, but let us see; in your product you infringed this, this and that patent of mine so you will end up paying us more than we would pay you. “ So, these small companies never make any product and profit by squeezing money by having patents and hiring lawyers.
2.The not so evil reason why companies patent is the same reason why departments in a research division patent stuff. Thing is that most of the ‘score card’ in the research division is centered around publishing papers and patents. The more papers and patents you have , bigger the grant in the next year plan. The same goes for companies. The more patents they have the more funding they might get from governments and other big institutions.
Now, where does all this place us in the grander scheme of things? It leaves us at a place where patents look like necessary evils, but that ‘necessity’ is artificially manufactured. It is like arms race. Killing is not desirable, but if you do not keep a gun, others might kill you. Despite that it has to be kept in mind that killing and guns are bad in themselves, and that should not mean that even as we keep guns we should not think about the elimination of the necessity of guns altogether.