The Business of Invention

By separating invention from manufacture we can create a strong “capital market for inventions”, says former Microsoft CTO Nathan Myhrvold*, and this will bring about greater creativity and rewards for all concerned.

Myhrvold is currently the CEO and cofounder of Intellectual Ventures (a company he freely admits as being “reviled as a patent troll”) and believes that a liquid market for ideas will solve many of the problems that have long plagued inventors and consumers.

Software owes its ascent largely to two crucial developments. First, software vendors gradually persuaded software users—through both education and lawsuits—to respect intellectual property rights and pay for something that they might otherwise simply copy. Then vendors liberated software from hardware by overcoming system incompatibilities and developing solutions that could work on many different brands of computer. When the PC revolution hit, software became an industry in its own right.

I believe that invention is set to become the next software: a high-value asset that will serve as the foundation for new business models, liquid markets, and investment strategies. The surprising success Intellectual Ventures has had over the past 10 years convinces me that, like software, the business of invention would function better if it were separated from manufacturing and developed on its own by a strong capital market that funded and monetized inventions.

To simplify the issue slightly, I feel that the end-product is desirable (an invention market), but the suggested route is less so (separation, ‘education’, lawsuits).

via @Ando_F

*Yes, the Nathan Myhrvold of that cookbook.