Patent history and slingshotting innovation past incumbents (aka guilds)

If you are in any way a patent geek - and let’s not kid ourselves, if you are reading this, you are in some way a patent geek - you owe it to yourself to read the new article from Professor Ted Sichelman and Professor Sean O’Connor entitled Patents as Promoters of Competition: The Guild Origins of Patent Law in the Venetian Republic (PDF available for download here, via Written Description). You may very well be someone who is convinced that the patent system tends to suppress competition and disadvantage new competitors relative to established incumbents or provide undue benefit to trolls, but the article’s discussion of the history of the creation of the patent system in Venice is worth your time on its own. Sichelman and O’Connor go beyond history, however, to argue that the patent system at least can provide opportunities for new market entrants, be they newcomers to Venice or startup technology companies. As their paper concludes:

The traditional view of patents focuses on the trade-off between competition and innovation incentives. Yet, at their origin in the Venetian Republic, patents functioned very differently. In particular, they fostered competition - first by foreigners and soon thereafter by Venetian citizens - with the entrenched guilds that otherwise were entitled to state-sanctioned monopolies. Understanding the competition-promoting role of patents not only has profound implications for historical accounts of but also for our modern-day views of patents.

While a study of the history of patents on its own probably will not change many minds as to what, if anything, should be done to reform our own patent system, Sichelman and O’Connor explore how the conflict centuries ago between established businesses and new innovators shaped the patent system. They even describe how different levels of entrenched interests may have resulted in different thresholds of patentability, a discussion that may echo to this day when we consider the various patent systems around the world and proposals from different interested parties for reforming our own system.

Of course, the experience of Renaissance economies certainly is not directly applicable to our own. Today’s technologies are more diverse than those of Venice in the 1400’s; we still make silk and felt, but we also make pharmaceuticals and robots and computers and countless other things that even a sophisticated Venetian of that time could not distinguish from magic. Even if there is a “right” balance between the interests of incumbents and new competitors that a patent system should strike, that balance may be different for different markets, or different technologies, or different countries. Regardless of the balance to be struck, though, understanding the history of trying to strike that balance can only help us.