Over at PatentlyO, Dennis Crouch covers the news that McCain has proposed a publicly funded prize for developing a better battery for cars. Dennis also points out how this strategy worked historically for England in solving an important navigational problem: John Harrison solved the timing problem by miniaturization.
One can only hope that this is a symbolic gesture by McCain toward the need for patent reform. $300 million is only a drop in the bucket that has already been spent on solving this problem. Ballard Power Systems, for example, has by itself spent at least that amount developing fuel cell technology, which many scientists believe to be a more viable alternative to the battery as a non-oil alternative power plant for cars.
I point this out not because I want the government to spend more money than McCain has earmarked for this R&D, but because I want the government to spend less money. That money has to come from somewhere folks. And that somewhere is taxes. Don't bet on it coming from a higher capital gains tax if McCain were elected either. The possibility of having another "conservative" president in office, increasing spending, decreasing taxes, and increasing money supply is terrifying to me. Already it appears that the United States has indentured itself to the rest of the world for the foreseeable future thanks to our profligate spending and inflationary monetary policy over the past few decades.
There is a proper role for government "prizes," a role that the NSF and NIH have been performing quite well for decades. That role is in funding the curious exploration stage of scientific discovery. Observations of nature are often the source of inspiration for later innovations by authors and inventors. Few businesses in the history of the world have been willing to pay for curious exploration of the natural world. We still need government funding for that.
But we should limit government funding to that stage, and let the needs of industry drive funding for development of those natural observations into new products and services. The distortions in the food market that resulted from government subsidies of ethanol production are Exhibit A as to why government funding of R&D is a bad idea. Government starts with a noble plan: to reduce global warming. But it ends with people starving in the developing world. To avoid catastrophe, investing must be disciplined by market needs -- a discipline that government, by definition, lacks. Private markets and firms are a cheaper way to make things than government because they don't make money unless they match (i.e., synchronize) their outflow of things to an inflow of demand for those things. Government doesn't have to (at least not over the short-term).
The United States should follow the example of the 15th Century Venetians, who harnessed the power of market-based incentives to encourage innovation in solving the most important problems their society faced. Read this description of how inventors worked together at the Arsenal, the 16th Century equivalent of Ford's Highland Park manufacturing plant (but for boats, not cars):
Everything concerning ship-building and armament, direction of the works, purchase of wood and iron, organisation of the workshops, discipline of the workmen, commanding of the troops, training of the seamen, storekeeping, provisioning and contracts was under the provveditori. They formed themselves into a committee for testing and examining all the new inventions submitted by their fellow-countrymen or by foreigners.
Rather than $300 million for the particular purpose of batteries, why not $300 million for marketing and public education about the patent system? The provveditori are like a combination of modern day venture capitalists and patent examiners. I don't think most Americans have any idea how important the patent system is to our future. Maybe patent law is too important to be left to the patent lawyers.
Update: I can't find a good modern analogy to the provveditori. Their work is performed by a combination of people and computers today. In some ways, they are like a heijunka box. In others, they are like patent examiners, lawyers, consultants, or investors. Their role in many companies today seems largely to be filled by goods and services obtained from various markets external to the company. Have we made a step forward or a step back?
The key phrase is: "They formed themselves into a committee for testing 'all' the new inventions submitted by their fellow countrymen." To that end, there was a right with global equality, just like our First Amendment recognized a right in 1791 to publish "all" new inventions, discoveries and writings by giving up the right of secrecy to inventions for a patent without editorial selection by a government editor, visa-a-vis the patent act of 1790. In 1791 it was off the table to refuse to recognize any inventions, discoveries and writings for publication. See Bilski, No. 2007-1130, 2008 WL 417680 (Fed. Cir. Feb. 15, 2008)for arguments relating to "Process" in Section 101 encompases any process, art, or method falling outside the judicially imposed prohibitions on patenting laws of nature, physical phenomena, and abstract ideas"; Parker v. Chakabarty, 447 U.S. at 315; Cornish amicus brief in Chakabarty re statutory limitations; Milton's Areopagatica 1644; and Cornish v. Dudas,1:07-cv-01719-RWR (Dist. Ct. DC 2007); and Cornish v. Dudas, 1:08-cv-5089 (CA DC 2008).
Posted by: judge cornish | 30 June 2008 at 12:26 PM