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In Italy last year, Fiat closed a plant. Just like patent protection in a developing country, it was not an asset to the company — but it's still an asset to the public. It does no one any good to just sit there idle.
Reva, the Indian automaker made arrangements to take over the plant, where they are going to build small, really cool-looking electric cars.
This is similar to the Patent-Free Zone principle. It's about using assets for the public good. It's about innovation rather than stagnation. And everyone wins — Fiat, Reva, everybody. And this is in Italy, a country with lots of patents filed. In a Patent-Free Zone country, it would be an even better business story — because return on investment in a Patent Free Zone is usually ten times more thanks to the immediate availability of "free R&D" (since so so few patents are filed).
Here's another example. In Mexico, there's an abundance of auto manufacturing. Companies based in the U.S. and Europe use factories there and export the bulk of what they make. Despite over 1000 automotive industry plants, the majority of cars sold in Mexico are imported.
That means, there are lots of people around who know about auto manufacturing. And it means there's a market ripe for a Mexican carmaker. And since most companies do not apply for patent protection in Mexico, a Mexican manufacturer could begin by cherry-picking the U.S. patent system. If this happened, Mexico would transform from merely a source of labor to a source of innovation. Its economy would develop. People would be raised out of poverty. And it would offer a more robust market for goods made abroad.
Now, let's look at it from a tech perspective.
There are over 1000 patents involved in an Apple iPhone. An iPhone is a pretty useful thing. It's even more useful in a developing economy where people don't have computers. And guess what, Apple does not apply for patent protection in Peru…or Ghana…or Ecuador…or most of the developing world.
That means local entrepreneurs could take a look at those patents and make an iPhone-like device. Think of all the innovations that would spring from that!
And would it hurt Apple? Well, no. They've already conceded these countries as a market. And if someone started making an iPhone-like smart phone there and it caught on, what would happen in 3 years — by then a market for Apple products would have developed. All those people used to using smart phones would be very attentive to whatever Apple put out.
Think about what it means for pharmaceuticals. Drugs for the kinds of diseases that prevail in developing countries exist. Yet because the people are so poor, drug companies don't sell there — nor do they apply for patent protection. Patent Free Zone entrepreneurs can and should start their own pharma companies by using the U.S. Patent System as their starting point. What would happen? Lives would be saved. The economy would improve. And those countries would eventually become bona fide markets for our drug companies.
Another benefit of a Patent-Free-Zone is that it lets you leapfrog to best-technology solutions.
A cell phone is clearly a superior telecom device to a phone that needs a wall jack — in Africa, mobile phones are all they have, so it's fast becoming an epicenter for mobile innovations.
In America, our power grid is no longer solving our problems — it is one of our problems. That’s not the case in Africa.
The same is true for nearly everything, from water treatment to renewable energy. They don't have to get off the grid — they were never on it.
There's a huge fresh water crisis in the world — water is clearly the most necessary resource on earth, yet we flush ours down the toilet. It's almost impossible to do real-world R&D here, because we love our flush toilets! Well, in most of Africa, they don't have them — so they can skip ahead to a more elegant solution.
Ditto for desalinization research, solar, and most of the technology that's needed to transform to a resilient low-carbon economy.
Say you're a corporation involved in the mobile phone business. The best place for R&D is going to be a patent-free zone in Africa. There you can freely research with different components without having to worry about patents – and you have access to inexpensive market research in the most dynamic mobile phone markets on earth. (Since 90% of all patents today are simply new combinations of known components, this is huge.)
In Robert Wright's book, "Non-Zero. The Logic of Human Destiny,” he talks about the demise of zero sum thinking – namely, the idea that for one party to win, the other party must lose.
Zero sum thinking has dominated the industrial age — and I think we can all agree that it's hit a wall. Climate change, intractable poverty, terrorism, water shortages — all the problems we face today demand non-zero-sum approaches. Approaches where all parties get to win.
This is what Thomas Jefferson thought ideas were for — to help everyone.
And I really don't know anyone who would argue with that.
Taking advantage of patent-free zones is a gain for all of us.
Just imagine: innovation - everywhere!
Everyone who plays, wins.
So my question is: who wants to play?