Reply To: Bill Gates

[Rezwan]

You’ve reminded me of the refrigerator patent conspiracy. I have no supporting documentation for this – OK, my source is my uncle who liked to point out that the CFC bans coincided with the expiration of patents on refrigerators. The conspiracy here is that the environmentalists are being used by big business to keep control of the market by making proprietary processes with expiring patents obsolete. The motivation here is that big business profits are derived from intellectual property rights, and once the patent expires, they can’t exploit it anymore. Eventually everything will end up in the public domain, and this is not a happy thought for patent owners.

This is an economic issue that I don’t have a good handle on. In the current case, we have big businesses happy to accommodate environmental fears and generate new patents and keep their market share. The losers, as you point out, are certain consumers who have to pay higher prices (although these consumers are free to switch to alternatives, for example, saline nasal rinses which don’t require aerosol and may be more effective for asthma). Other losers are businesses that were prepared to mass produce the older technologies at a much cheaper cost (like third world companies) who now are unable to exploit the expired patents.

In the long run, is it better to keep this up, to keep finding ways for businesses to come up with new patents and jack up their prices? How does our economy work? Do those consumers have shares in the companies that they buy products from? Are any of them (or the consumers of the businesses they work for) employed and overpaid by these companies? It’s all interconnected in a big tangled economic web. How much of pricing is artificially sustained, and how good or bad is that?

Like I say, I don’t have a good economic model or equations to try and process this dilemma.