Re: Sopa / Pipa
@zarf:
I'll answer to point 2, will try to do the rest later,
"That being said, you have to take into consideration the specific inventions before considering the patent. Probably the most important aspect would be the good's market elasticity. If we're talking about, for example, a cure for cancer, people must buy the product no matter what the price... so the original producer is able to require a higher surcharge to compensate for prior research. Thus, it's more likely this would be on the lower end of the patent structure."
agreed.
"But this obviously creates a problem. If, for example, a .01 pill was being sold at $200 per pill under a 20 year patent, reducing the patent length to 2 years would require an arbitrarily high (maybe $2000 or more) price for the pill... and because the good is inelastic, people have little choice but to accept."
I disagree here unless you're talking 100% hypothetically. Lets take this example as opposed to the real world you still have to consider at least three important points:
1. unfortunately, even a human's life has a price.
2. no medicine is guaranteed to succeed for a certain disease, not even antibiotics.
3. human's subjectivity towards the medicine's effect.
4. in some countries gov subsidizes some medicines.
So in your example we have three scenarios:
2 years patent:
The price is as high as their public can pay. If 10 people can afford a $20 pill or 30 people can afford a $10 pill, they choose the latter. Most probably they would do a mix with a more expensive better working edition etc etc but you got the point. They will not make it $30 if no-one can afford it. They won't sell anything.
20 years patent:
Same story. Only difference is if those people who live thanks to the medicine might invest in something else the same company has to offer. They'll add that to the equation.
No patent:
-The medicine is possibly not invented- otherwise:
Free market will cut short the prices.(if the knowledge how to make it is spread that is)
I presume in real life, companies won't go as far as the people might riot if they cannot afford to live.
The most important question is, how long does it take a company to regain the initial cost of the invention? This poses a problem in our discussion as this is a very difficult equation and almost impossible to calculate.
"However, if we're talking about a post-it note, something people really don't "need," the surcharge an individual would be able to place on the item during the patent period would be lower, because more people will avoid the product in response to higher prices... thus, it's likely this would require the longer of terms for patent lengths."
That will prevent a lot of people using it. Companies and individuals are proly a bit less productive. This product might be produced less effective as there is no competition. No-one can improve the invention but that company.
"Now, this would obviously have the problem that individuals would have to either classify each type of good's elasticity or create broad categories based on market elasticity. But, in terms of economic efficiency, yeah, I do recognize reforms could take place changing the term of the patent."
I think we agree there.
"Also recognize, though, that patent lengths aren't created at the national level. The terms are constructed as an international standard for the sake of establishing continuity in international trade. So if there is a reform, it's much more difficult even than Schoolhouse Rock suggests."
I admit have no answer to this problem. I do believe that its good to have the same agreements internationally.
In general I agree with most of your ideas and views you replied to point 2 of my initial post, like the variation in duration and what it should be based upon, but we have different opinions on the maximum duration I think.
I'll reply to the other points later