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IPFS News Link • Business/ Commerce

Verizon-Yahoo Deal Shows Once Again the Need to Remove Intellectual Property Rights

• http://www.thedailybell.com

Verizon is buying Yahoo for $4.8 billion … It's official: The sale completes Yahoo's evolution from influential search pioneer and web portal juggernaut to, in the end, a once-dominant brand that lost its way. Parties as diverse as Warren Buffett and The Daily Mail were interested in buying Yahoo. But after a sale process that dragged on for months, Verizon (VZ, Tech30), long viewed as the frontrunner, is walking away with Yahoo's more than one billion monthly active users. –CNN Money

Another huge merger has taken place. Perhaps a billion consumer emails plus related technology will change hands, further stratifying the Internet and providing less opportunity for others.

If people believe the pace of technological innovation has slowed in the past years, they are probably correct. As ZeroHedge pointed out in May, "Venture capital investments in Silicon Valley fell almost 20 percent in the first quarter [of 2016] from a year earlier to $4.9 billion."

We would argue this is part of a larger trend. With such gigantic companies dominating the Internet, there is less room for groundbreaking innovation.

These large companies act as gatekeepers, preserving what has already been accomplished and ensuring to a large degree that what is now developed doesn't threaten what has come before.

As usual, intellectual property rights are at fault. Absent court enforced intellectual property rights, the pace of technological innovation might actually pick up and technology might move in new or unexpected directions.

We've argued before that in the modern era, intellectual property rights are not performing the functions that were intended.

This is not surprising. We certainly know from "human action" that no law works as intended. In fact, laws are basically price-fixes, redistributing wealth and reducing opportunity.

Here's a statement by Justice William O. Douglas as pertains to a case entitled A & P. TEA CO. v. SUPERMARKET CORP., (340 U.S. 147, 1950).

Every patent is the grant of a privilege of exacting tolls from the public. The Framers plainly did not want those monopolies freely granted. The invention, to justify a patent, had to serve the ends of science – to push back the frontiers of chemistry, physics, and the like; to make a distinctive contribution to scientific knowledge.

Who exactly decides what is a "distinctive contribution." Like most such law, the guidelines themselves are so vague as to prevent any sensible enforcement.

Here's an excerpt from an article in the Atlantic entitled, "The Case for Abolishing Patents (Yes, All of Them)."

Our patent system is a mess. It's a fount of expensive litigation that allows aging companies to linger around by bullying their more innovative competitors in court. Critics have suggested plenty of reasonable reforms, from eliminating software patents to clamping down on "trolls" who buy up patent portfolios only so they can file lawsuits. But do we need a more radical solution? Would we be possibly be better off without any patents at all?

That's the striking suggestion from a Federal Reserve Bank of St. Louis working paper by Michele Boldrin and David Levine, professors at Washington University in St. Louis who argue that any patent system, no matter how well conceived, is bound to devolve into the kind of quagmire we're dealing with today.


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