Innovation and the Free Market

by Harold A. Meyer, III

The government needs to let the free market work

Let's face it. Every inventor's dream is to invent a great product, patent it, have the world beat a path to his or her door, then get rich. Filthy rich. It rarely works that way.

As Tom Mosely says in his book Marketing Your Invention, if only one percent of patented products are successful, where are you if you don't have a proprietary position? Even if you have a patent, the odds are against you...like 99:1 against you.

So why invent? Part is the challenge, part is the promise of money, part is sheer self-confidence, part is self-delusion, part is the education --but rarely can you escape the reality of the market which in the final call always gives your product the thumbs up life giving cash, or the thumbs down death sentence.

The bottom line is that our entire economy needs invention. Inventing and technology are endogenous to our economy; inventing and technology ARE our economy. Dollars flow to the entities that produce new and useful products/ services. What other basis is there for an economy?

A truly evolved government would reward inventors and do everything possible to solicit and subsidize industry-creating invention. Government could be an ally to inventors. Instead, the government taxes i9nventors with patent filing fees, maintenance fees and other costs. These fees discourage invention at a time when government should be envouraging invention. The benefits of invention are many. Successful inventions give our economyproducts to export, give employers necessary cash flow, give employees products to make in exchange for paychecks, give the government income to tax, etc..

Govt fees are essentially an "innovation tax" to discourage inventing

In addition to government fees, there are numerous other costs associated with inventing. These inclkude living expenses, telephone, printing, prototypes, lawyers' fees, etc..The PTO filing fee is often the last straw that breaks the inventor's back. Filing fees and maintenance fees are essentially an "innovation tax" to discourage inventing and industry.

It would be an interesting experiment to have the small entity filing fee reduced from $365 to $50 for six months or a year and evaluate the effect that this would have on the number of submitted patent applications. Although the current small entity filing fee of $365 costs the average inventor one half what it costs Exxon to file a patent application on the same idea, I can assure you that Exxon has far in excess of twice the resources of the average small entity independent inventor!

Many inventors are sitting on new technology with their mouths zipped shut simply they cannot afford PTO fees which they feel must be paid to adequately protect their interests and investment. Let's get rid of the "innovation taxes"!!!

The other big problem with government vis-a-vis inventors and business is regulation. For example, consider the Microsoft situation. The US Justice Department was all upset about Microsoft "bundling" its Windows 95 operating system with its online service, MSN. When Apple Computer tried to monopolize computers in the late 70s and early 80s with operating systems bundled with applications (all of which were based on proprietary and incompatible technology), what happened? They got only a small market share. And now Apple is fighting for its life. The marketplace determined what's right.

To the Govt: Stop charging us inventors so much money!

The government needs to let the free market work.Sure, Microsoft plays hard, but they have given far more to the economy than they have taken. Hundreds of its employees are millionaires thanks to owning company stock. Their software operating systems have enabled numerous other software applications and hardware companies to make money. Microsoft gives us a model to strive for, to emulate.

We need more monopolies. Look at the patent system. When it works best, the government granted limited patent "monopoly" works as a carrot to spur on innovation. The government needs to give positive incentives. Back in 1776 Adam Smith taught us this lesson in Wealth of Nations and great men (and women) such as Milton and Rose Friedman (Free to Choose) have occasionally reminded us of its importance.

All of us little guys want the incentive and the chance to be like Microsoft. At the very least, we'd like Microsoft to be treated fairly so that we can nurture our own dreams for the same opportunity. As Blackstone said, "I seek justice for the Devil not for the Devil's benefit, but for my own."

The message to the government from inventors is this: "protect us, then get out of our way. Above all, stop charging us so much money --we are doing you the favor!"

This article was originally published in Inventors' Digest in Jan./ Feb. 1996

(c) 1/1996 by the author

Harold A. Meyer, III, 33, is Chairman of The Hook Appropriate Technology, a performance based licensing, marketing and new product development company. Meyer is also President of the non-profit group, THE INNOVATORS Guild of Danbury, CT. He can be reached at: The Hook Appropriate Technology, 52 Bank Street, Suite A, New Milford, CT, 06776-2706 USA. VOICE: 800-HOOK-VOX, EMAIL: info@thehooktek.com, WEB: www.thehooktek.com

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