I offer one more alternative. Double the tax every year, and once the ip holder decides not to pay the tax, IP is released to public domain. No compnay has money to keep IP indefinitely in such a scheme.

I've proposed this alternative on message forums like this for probably 20 years now, but specifically for copyright. I think it'd be a great way to let Disney and co. have the long copyright terms they want for extremely valuable properties, but get other stuff into the public domain much, much faster.

Instead of doubling every year, my proposal is 5-year terms: the first is free, then $1000 for the next 5, $10k for the next 5, $100k for the next 5, etc. Feel free to adjust the actual dollar amounts, but you get the idea. Most stuff would be in the public domain after 10 years, if not 5.

I would suggest only for corporations above a certain size. I would appreciate if some old music composer somewhere gets to continue being old and stuff without worrying about this sort of thing.

Music is coveredby copyright , an entirely different law

A lot of patent trolls are very small companies though

It would have to be managed by tracking the number of active patents. You get 100 active patents tax free. Over that, and you have to pay an annual fee. This allows for independent inventors to operate as the system intended while clamping down on NPEs.

Music compositions get covered by copyright. Patents are another section of law.

It'll only be impossible to hold for long periods of time. We can start the tax at $1, it hits $1mil after 20 years - and for 99.9999% of IP by year 20 it's either clearly worth zero or clearly worth >$1mil so it'll be an easy choice. It'll force things into the public domain faster and make it expensive to hold a big bullshit patent catalog, but for actively used properties it'll be fine.

Companies are going to want to sell in one of the richest markets in the world; they can either pay for IP protection or not be granted it.

edit: I'm not suggesting these exact $ values as clearly being the correct ones, it's just an example.

You do not seem to understand how patents work because of other comments thinking that you can patent something without publicly disclosing the invention. In and of itself, this comment is silly because the answer to your question "What do you think will happen if IP becomes impossible to afford, as it surely will under such a policy?" is "exactly what happens when patents expire currently." It appears you are unaware that companies still invest in R&D knowing they at most get a few decades of exclusive rights.

in the software ip case, they can invest in building competitive products in an open market. If your software IP is a secret then don’t publish!

So, for example, the secret sauce that makes the CPLEX and Gurobi solvers tens or hundreds of times faster than open source equivalents should simply be released to the public, leading to the immediate loss of 90% of those products' competitive advantage?

You don't see how such a policy would spur terror among large, profitable companies with trade secrets, leading to them moving overseas?

If it's secret sauce, it's not a patent.

In these threads it always end up being: "Sure Foo would be nice, but, I don't know if you are aware, we are actually held at gunpoint by the status quo; its all really a non starter when you consider this fact."

If this is the only real problem, than why not just let them go overseas? Let the market play it out? The boon of progress and freedom X country would get from becoming even little more rational about IP would pay for itself and be better for actual people.

> The boon of progress and freedom X country would get from becoming even little more rational about IP would pay for itself and be better for actual people.

That's what China has been doing for decades, and "gongkai" [1] is just one tiny part of it. While life for the average Chinese citizen has gone up - the CCP managed to lift hundreds of millions of people out of poverty - the life of most Western populations has gone down the drain as entire industries, entire towns were unable to cope with unfair competition.

The societal consequences of that will haunt us all for many years to come.

[1] https://www.bunniestudios.com/blog/?p=4297

I don’t think you understand how patents are used. It’s not secret sauce if it’s patented.

Something like this genuinely does hurt very small businesses or inventors who invent something actually valuable but don't have time to quickly scale up.

What I like for IP laws is as follows:

When you create a protected work, you pay a very small fee. Say, $1 for copyright, maybe $500 for a patent.

Each year thereafter, if you wish to maintain your IP protection, you must pay double what was paid the previous year. Otherwise the property reverts to the public domain.

This ensures a period of protection if it's genuinely needed, but ensures that everything will eventually enter the public domain, especially in the case where no one is making any economic use of the material.

Patent protection already is not indefinite. It seems much simpler and more fair to shorten the protection period.

Even if we halve the patent protection period, that is still ten years during which a patent troll can scoop up a BS patent and then simply send threat letters and rake in money, while chilling any actual advancement.

Currently, there's an incentive to disallow progress. If someone does not want to make use of their own patent, they are currently incentivized to sit on it and keep the ability to create that thing out of the hands of anyone else, "just in case". If we shorten the period as you suggest, to half (for example), then that freezes that progress for a decade.

If an incentive is created to put inventions into the public domain if one is not using them, then that is better for everyone.

And by doubling the fee each year, it becomes financially infeasible for even large companies to keep things out of the public domain forever. A fee of $500 that doubles annually would, at the 20 year mark that is the current patent lifespan, cost a half a billion dollars to renew for that year.

Something I've wondered about - you specify a value and pay a tax accordingly. Anyone is then able to buy it from you for that price. Have some short term part for free, then fees scale over time.

A slightly different version was in use in Denmark:

a ship declared the value of their cargo for toll purposes. They decided the price, but the catch was the customs could buy the cargo at that price.

That is fiendishly clever.

It sounds nice in principal but I think it’s not so easy in practice, if I asked you what’s your car worth you probably say something along the lines of well it would cost x to replace it, or I paid y for it, or I could sell it for z on eBay (all three different prices) but if you then said that well whatever price you say someone can buy your car for and you’re stuck with without a car while you go figure out replacing is actually a price is not any of those prices, and is probably higher than the actual value, and may even be higher than the cost to replace it - you might say that’s the idea but ultimately it feels creepy to make people pay a tax to avoid the risk of an asset they rely on not to be taken away at an inconvenient time…

The value to me would be the replacement plus hassle value.

There's clearly values I'd easily accept, you offer me a hundred grand for my car and you can take it whenever you want.

Now for regular items like a car this would be hard. How do I value it and how do I not get caught out when second hand sales spike and I don't follow the markets?

But we're not talking about everyone's car. We're talking about asking the state to forbid others to make or build certain things (yes I know it's more detailed but you get the meaning).

Yep but that’s kind of my point - let’s say your a poverty level worker with a POS car “worth” $2k but it’s reliable and you need it to go to work, and finding another one for a solar price carries the risk of finding a lemon or having unexpected bills your going to end up saying it’s worth $[4]k because it would be a really bad day for you not to have your car and taking the risk on a replacement is just not worth it. You end up paying a higher tax rate than the guy that’s got three cars in his garage and his happy wearing the risk over time of being slightly under replacement value since it lowers his effective tax rate and if he’s out a car for a bit at slight loss that’s no big deal..

That extra “value” (or tax on people) you ascribe to your car may or may not be distributed in manner that societally makes sense

alternative: anyone is able to make it public domain for that price

This creates a clear and obvious arbitrage opportunity that finance people on Wall Street will exploit almost instantly.

Ok? It results in them paying taxes while they hold it, to the value they ascribe to it. If they say it's higher than the original buyer, we get more in tax revenue

Or have I misunderstood your point?

You’ve misunderstood my point. This is formulaic finance math. In normal finance markets, there is a natural equilibrium where markets fully value the risk of mis-pricing the asset as part of the asset value. In the scenario outlined, only one party in the market is taking that risk, which means any financially savvy third-party can basically make free money off assets owned by others almost risk-free under a wide range of scenarios. Instant profit while producing no value. It would create an entire parasitic finance industry dedicated to exploiting it. You won’t generate much tax revenue if you destroy elementary mechanics of the economy along the way.

It may not be intuitive how the math works but this would be exploited so hard it would cause serious social and political issues. I don’t have a dog in this fight, I am just savvy enough to the math to see how bad an idea this is. Which is probably why no government has seriously attempted it even though it is an old idea.

Could you outline a single example or at least provide a reference to understand this more? I'm not at all getting what exactly these third parties would do. How is it different from just putting up items for sale with a price?

That would effectively kill software patents. Which is a fine outcome.

This is better than what I proposed.

Doesn’t work.

Lots of people don’t know what their IP is worth, and it can change with market and tech trends.

And the damages aren’t based on the harm to the IP owner, but on the benefit to the infringer.

I could have a patent that I think is worthless, but in 10 years I discover that a multinational flat out stole the IP after an NDA meeting. What is the value that I should have declared?

But property usually isn't taxed. Trading is. If you license a patent to someone else for $500/year, you'd pay tax on that $500. But if it's actually worth more, of course you wouldn't charge such a low fee.

Property is almost always taxed. In Texas, property taxes on homes are 2.5 - 3% of value, most people pay between 8K - 30K every year. And this keeps going up! Over a 30 year mortgage, I'm sure most people pay more on property taxes than on their home. Approximately 50% of property taxes go to school districts, the rest for other municipal services.

Some states also tax car as property.

What is not taxed is Intellectual Property. Because it is almost completely owned by the super rich. And, of course, these billionaires need all the help they can get. How about we change this? We can think of wiping out property taxes for homeowners (making homes affordable) and fund education from patent taxes. After all, the super rich are deriving these patents from the education system, its only fair they pay their fair share.

Real property is an exception but we're talking about other kinds of property. I don't know of any other kind that's commonly taxed.

To my knowledge, all US states have property tax.

That's the point up thread.

It isn't now, but we could make it so.