The Berkeley round of the FTC hearings on the Evolving IP Marketplace gave me plenty of food for thought. I was especially impressed with the faculty and tech transfer folks from Berkeley, including Carol Mimura, Henry Chesbrough, Peter Menell, and Richard Gilbert. Berkeley's recent moves to establish closer ties between industry and its faculty are going to ripple out to change the way we think about tech transfer and venture capital more broadly. If I recall correctly, Carol was overlooked by the person making introductions of the speakers on the first panel. Ironic since her presentation was by far the most important to my mind.
From the tone and substance of the remarks along with the larger attendance in the gallery, I gathered that the damages panel was considered by some to be "the main event." Not surprising, really, since damages apportionment has been the key issue blocking patent reform legislation over the past couple of years. The panel mostly rehashed the arguments we've all heard before, although there were a few hints at more creative solutions. More could have been said about relative institutional competence.
But here is my thought for Broken Symmetry readers to consider: Are measures of damages really the biggest issue for patent reform? Sure, damages are where the rubber meets the road as far as patent lawsuits, and hence licenses go. But the lesson we should have learned from the other panels is that patent rights are only part of the intellectual property that is being created and shared by inventors at startups, universities, and R&D labs in the United States. And it's not even the most important in terms of getting problems solved.
The biggest issue for patent reform in terms of social impact is what F.A. Hayek called "the knowledge problem." As any society grows, the dispersed bits of knowledge held by its members have to be coordinated so that organizations can grow through commerce and other forms of cooperation. The patent system that was perfected (if not invented) in the mid-19th Century United States is the most sophisticated system ever known for coordinating the creation and sharing of knowledge. Damages apportionment issues represent a rounding error compared to the massive social costs of redundant inventing, excessive secrecy, fear of idea theft, translation and language barriers, and other transactions costs to the sharing of ideas that the patent system is meant to reduce.