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.