Mid-sized cities outperform major metros at turning economic growth into patents

Are patents (and trade secrets) the right model for protection?

I've been wondering this. It seems that, they were the right model, back in The Day. Back then, what you had (in my model) was a few inventors, cash-strapped or with wealthy benefactors, and they wanted to protect their inventions. Poor inventors, in other words.

I imagine that, back in the day, with smaller government and regulations, and everything 'cheaper' even 'litigating' the case would have been achievable for such poor inventors. In such a scenario, the patent could be a tool of the tiny against the behemoth exploiter (ye olde robbere barron). Ie, true protection.

These days however? Not so much. To litigate takes years and millions, effectively denying the protection to those who could most benefit from it. The "high bar" to protect your protection creates an incentive where you see conglomerates emerge that use that cost to coerce settlements, and make a business out of it by purchasing many such supposedly 'protective amulets'.

It's also a good model for the 'protective amulet forging guilt' (ie, lawyers). Who will often tell you, "Have you considered a patent? We can help if you choose to go that route."

But is the patent, once so lauded, useful and genuine - really the right model for protection today? Could it be reformed? Or should it be relegated to the past? Like mint coin collections of yesteryear - now without real value, except for collectors and traders (ye olde patent trollus).

I don't know. Thoughts, anyone? Especially valuable I think would be personal experience and the thoughts gained from that, as well as any big picture reflections.

> Are patents (and trade secrets) the right model for protection?

This probably deserves a more expansive discussion in its own right. I think what has become clear is that the tools we have (patents, trade secrets, copyright) are extraordinarily crude. Nonetheless, they worked pretty well in a time when intrinsic friction and overhead in markets was high.

Now that we’ve eliminated almost all friction in markets, everything has become extremely sensitive to the intrinsic cost and supply chain structure of the IP being protected and the speed at which those supply chains can adapt to competitive opportunities. To make matters worse, these intrinsic cost and supply chain structures tend to vary considerably depending on the particulars of the domain. Consequently, the IP protection tool in any particular case is the one that in practice has highest cost burden (both money and speed) on anyone trying to circumvent it with the lowest cost to both implement and defend. Patents rarely win that argument anymore for many things.

The most robust protection these days is information asymmetry, and trade secrets are good at maximizing that. Unlike patents, it is also extremely cheap to implement, so it is economically favorable. Defending that information asymmetry has become more difficult in some ways (more sophisticated reverse engineering) but easier in others (hello cloud). Unfortunately, we lived in an age of trade secrets in past centuries and it had many downsides; patents were essentially invented to mitigate those downsides.

The entire dynamic has many downsides but trade secrets are essentially winning out. Information asymmetry still has a lot of market power if you are good at exploiting it, much of the benefit isn’t even the secrecy per se in many cases.