Our pals at Third Way had a nice event on Wednesday with Dean Kamen (inventor of
the Segway) and Ralph Eckhardt and Mark Blaxill (authors of the new IP-centric
book, “The Invisible
Edge”). The focus of the event was innovation and American jobs; Kamen
talked about his efforts to build future generations who are interested in math
and science, and Eckhardt and Blaxill talked about how intellectual property is
crucial to innovation and future job creation.

All three were great, but the most interesting exchange came
during the Q&A portion. My colleague Morgan Reed pointed out that
oftentimes IP, and patents specifically, is referred to as a “tax on
innovation.”  Several times we’ve seen
legislation on government funding of technology projects that specifically call
for open source technologies, or say that technologies with IP will not have
access to the funding. What, he asked, is the best way to address those lines
of thought?

Kamen’s answer hit on several interesting points that
policymakers should hear more often from true innovators and business leaders.
He said taxes are essential, and that we tax lots of things in this country to
fund other essential things. He went on to say that an appropriate response
would be pointing out to policymakers that their plans are perfectly
acceptable—if the goal is to eliminate the most powerful incentive to innovate,
and simply let giant multinational corporations be the only players in a given space.
Those same policymakers should be asked how they think giant multinational
corporations got to be so big in the first place, and how they how they had ability
to create technologies so good that they essentially became de facto standards.
If those companies are supporting mandates that don’t allow IP-based solutions,
everyone should ask it if those companies would suggest stopping incentives to
innovate while they were NOT at the top of the market.  Kamen defines innovation as, essentially,
productive destruction of what’s here today, and so supporting policy that will
effectively put the brakes on other people’s innovation is a perfectly rational
and intelligent business decision to make when you’re on top.  And he said that taking away incentives for
innovation is just fine if you’re willing to say that we have reached the
pinnacle of human success, and that we need nothing more than we have right
now—that we never need a better drug, a safer car, a faster processor, etc.

To the specific question of removing intellectual property
from the business and innovation equation, Kamen said that yes, companies might
be able to pass along a 2-3% cost savings to the consumer but that model will have
killed off incentive for innovation. He posed a great question: “How can we
measure the cost of what will never be?” Incentive is the fundamental agent of
economic growth, and the incentive for the little guy to engage in productive
destruction of what we have today is the protection of intellectual
property. 

A holder of more than 400 patents worldwide, a member of the
Patent Public Advisory Committee (PPAC), and all-around smart guy, Kamen is
clearly well-schooled in the patent reform issue and arguments about patent
quality. To that end, he drew the analogy between dis-incentivizing innovation
and how we dis-incentivize money counterfeiters—if there’s a problem with bad
guys counterfeiting ten-dollar bills, the solution is not to crack down on the
Department of the Treasury and stop the production of ten-dollar bills. The
same is true in the innovation space; there are going to be bad actors, but the
solution is not to get rid of IP rights. The solution in both cases is to
penalize the bad actors.

Lastly, I dove in to Eckhardt and Blaxill’s great book this
week, and will be writing more about it here and at the Innovators Network. It’s a great
read so far and I agree with many of the big-shots who provided blurbs for the
book jacket, but will add this: It’s an essential companion to “Little Blues:
How to Build a Culture of Intellectual Property Within a Small Technology
Company” by our friends Andre Carter and Ray Millien.