Bonum Certa Men Certa

If Patents Win in the West, Then the Chinese Win

Terracota warriors



Summary: Patent wars and bureaucracy slow down production, create financial bubbles, and can ultimately lead to increase in debt

THERE is this famous type of joke which ends with "then the terrorists win!" That's basically the idea behind the title above (not that the Chinese are terrorists, I personally admire the Chinese). The worst that the West can do is neglect production and falsely assume that paper-pushers in an age of so-called 'knowledge workers' will help repay the huge debt to China. The matter of fact is, China already immunises itself against Western patents and while the West wastes time and energy on litigation, patent applications, patent reviews, and crippling of products as means of avoiding being sued, China's export is thriving.



Wayne Borean echoes analyses we have seen a lot of in late 2008 when the world markets collapsed. He says that "Intellectual Property" is a bubble that artificially inflates valuation of many worthless things. And moreover, to quote:

Intellectual Ventures is one of many companies that is investing in Innovation according their their press releases. Another is Acacia Technologies. These companies are buying up patents, and attempting to license them.


As if the patent 'business' was not bad enough already, the lawyers in IAM say that in Britain there's this notion of "patent tax incentive" in the pipeline. Ridiculous! We mentioned this before.

The Institute of Fiscal Studies - a highly-respected, independent research organisation that scrutinises fiscal and economic policy in the UK - has published a paper that questions the effectiveness of introducing a so-called patent box. Under the proposals, which were first announced by the previous government, and have now been rubber-stamped by the current one, income derived from patents in the UK would be subject to a Corporation Tax rate of just 10%.


In order to compete in this century (even decade) and as means of maintaining or regaining dominance, the West will need to remove the 'innovation tax' -- the hidden cost associated with patents and the meta-industry which hovers above it like a group of vultures or satellites optimised for guided missiles. Make products, not (patent) war.

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