[cromwellian]

"R&D company" that ships no produces seems a bizarre concept to me. If you're doing pure research and you don't want to manufacture anything, then outsource it, or partner with someone who can and sign them to an iron-clad contract protecting a trade secret.

I'm be curious if anyone can even name any "pure R&D" software companies that don't ship products, yet created meaningful advancements. Even in the realm of hardware, did RAMBUS really need patent protection?

[rayiner]

Trade secrets you share with other companies are fragile rights. Do you want to invest a ton of money into a company built on a property right that could evaporate at any moment? Re: meaningful advancements, I think MPEG is a decent example, as well as some wireless companies (it's really hard to draw a clean line when it comes to wireless, because a lot of techniques could easily be implemented on a general purpose computer or in an ASIC).

As for RAMBUS, the memory industry is an interesting example. They all work on developing memory technologies, then pool the patents. The patents function to prevent free-riding on the collective effort by any particular company. The wireless industry works similarly (LTE, etc).

I don't mean to argue that the law should protect particular business models. But I think in the abstract, it's useful to be able to bundle up the fruits of some R&D into something that can be the subject of market transactions. I think it's worked amazingly for the semiconductor industry in the model of ARM, for example. The law can provide a mechanism for doing that. I don't think trade secrets are quite it, and I think we're really seeing the limitations of patents for that in the software realm, but I think there needs to be something. Otherwise, it'll be a race to see who can outsource most effectively to China because that's what matters when ideas can't be protected.

[euroclydon]

ARM Holdings. From Wikipedia:

Unlike other microprocessor corporations such as AMD, Intel, Freescale (formerly Motorola) and Renesas (formerly Hitachi and Mitsubishi Electric),[28] ARM only licenses its technology as intellectual property (IP), rather than manufacturing its own CPUs.

[thomaslangston]

Not a software company.

[smnrchrds]

He was referring to "Even in the realm of hardware, did RAMBUS really need patent protection?". There are definitely exceptions in hardware business.

[throwawaykf02]

> I'm be curious if anyone can even name any "pure R&D" software companies that don't ship products, yet created meaningful advancements.

There are many examples (in addition to ARM) -- just think "research labs". Be they government-sponsored, private or academic, their primary function is R&D, not shipping products. One example of a private lab, off the top of my head, is SRI.

Also, though you may claim they don't count as "companies" -- universities.

Edit: Additionally, in the realm of hardware and semiconductors, most companies these days are actually fabless [1]. There is a study claiming that patents facilitated the entry of specialized design firms into the market, although incumbent industry executives didn't look on them too favorably [2].

BTW, Rambus is not the best example. They created a lot of controversy when they asserted their standards-essential patents, the same thing Motorola is doing these days. Whether they "really needed patents" depends on which side you're looking from. But for the industry in general (and I am horribly oversimplifying very nuanced conclusions), the answer seems to be yes for startups, and a mixed bag for big ones [2, 3].

1. http://en.wikipedia.org/wiki/Fabless_manufacturing

2. http://www.techpolicy.com/Articles/P/Patent-Paradox-Revisite....

3. Various other papers by Rosemary Ziedonis at http://www.techpolicy.com/Academics/Ziedonis.aspx

[sspiff]

rayiner wasn't talking about software. Software companies have an easy time "producing" their products. It's much harder in the hardware sector or when you invent car technology. Getting into those markets is expensive. Forging a deal with a car manufacturer, for instance, would put you in an extremely weak negotiating position. Patents give you some leverage and a defense mechanism when they go and use it without your permission.

So I also think ARM is a valid example of companies that wouldn't be alive if not for the patent system.

All that said, I'm not in favor of patents at all. Thinking of something should not give you ownership over a broad concept. Information should be shared freely, to improve upon and so everyone can enjoy the invention.