I am in Berkeley for a conference on the economics of competition and innovation - mostly about patents. It's a good conference, organized by Richard Gilbert, so I thought I'd try my hand at live-blogging. You can access information about the conference, including the papers here. I was a discussant at the morning session, which was quite lively. There were two papers, one a nice clean paper by Carl Shapiro showing how giving stays of injunctions to allow the redesign of products can substantially reduce the hold up problem, and a second paper by Anne Layne-Farrar attacking the Shapiro paper - mostly pointing out that the analysis doesn't apply in many cases. Since Carl didn't argue that it did in those cases, I'm not sure why this was an issue.

The discussion was quite lively. Strangely, I was the quiet one - Carl's model of downstream innovation is one in which patents are completely neutral, which I found useful for pointing out what we should be looking for to determine whether patent systems are a good idea or a bad idea. The wild discussant turned out to be Aaron Edlin who I hadn't met before, but is highly entertaining. He also appears to have no higher regard for the patent system than I do - and said so in no uncertain terms. Interestingly he comes at this from a business perspective - he runs a successful publishing business, BEPress. I think he is part of the majority of the R&D surveys in which they say that patents are only a hindrance to business.

I am not sure why people tend to comment on subjects about which they do not know much, if anything; worse, they tend to draw conclusions in hasty ways--precisely because they do not know much. An economist is not necessarily a law professor. Even if he is (aka Aaron Edlin), an antitrust law professor is not necessarily a patent professor or a public policy professor. We have entered the era in which polymaths such as von Neumann are really realy rare. It is common knowledge that the IT industry cares for patents far less than the Pharma industry--your "hindrance" statement is either due to incomplete research or personal bias. BTW, Edlin's apparently improper manner during the talk showed that even his impressive CV cannot save his students from thinking him as an a-hole.

The hindrance statement is how I read the responses to two large survey's of R&D managers in which they answer a variety of questions about the patent system. My interpretation is that the thrust of the answers is that they view patents as a hindrance to research rather than a help, except in a few industries of which Pharma is one. If you want to know more about the surveys, here are some references:

Carnegie Survey: Cohen, W. M. and J. Walsh [1998], "R&D Spillovers, Appropriability and R&D Intensity: A Survey Based Approach", mimeo, Carnegie-Mellon University Cohen, W.M., A. Arora, M. Ceccagnoli, A. Goto, A. Nagata, R. R. Nelson, J. P. Walsh [2002], "Patents: Their Effectiveness and Role," mimeo, Carnegie-Mellon University. Cohen, W. M., Richard R. Nelson and J. P. Walsh [2000], "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)", N.B.E.R. Working Paper No. 7552, February.

Yale Survey: Klevorick, A.K., R.C. Levin, R.R. Nelson, and S.G. Winter [1995], "On the Sources and Significance of Interindustry Differences in Technological Opportunities", Research Policy 25, 185-205.