When my spouse and I were new, new parents and my son was a very new baby, we had some theories about what we "ought" to do. Assorted books and mentors had cautioned us, for example, never to just "let him cry," ever. To get him to sleep we were to stand by him and rub his back, speak softly to him, and on and on. To make a very long story very short, our little guy finally settled down only when we became so utterly sleep-deprived that we abandoned our most cherished theories and focussed on what actually worked--including, sometimes, letting him wail for a few minutes. For a couple of over-educated parents, letting go of the theories was a big deal.

The EU seems to be in the same sort of pickle we found ourselves in. They are wedded to assorted theories of competition, openness, innovation, and an expansive role for government that just are not bringing results. There are examples around the world of successful frameworks for innovation to which they could look. But the EU seems to be the sort of charming, civilized, superior box that it is hard to think outside of. Cut taxes? Free the labor market? Not they. Around and around the box, like so many hamsters clad in little black berets, they pursue Microsoft...

Ian Harvey's "Creativity Destruction," in the WSJ (subscription required) assess the situation thus:

Embedded in Competition Commissioner Neelie Kroes's objections to Microsoft's proposals for licensing its technology to rival firms, which she outlined in March, is that her department -- known as DG-Competition -- will decide what is or isn't innovative and how much people and companies are entitled to make from their intellectual property. . . The problem, for Microsoft, is that DG-Competition has decided that Microsoft's patents are not innovative -- even though the European Patent Office has already decided that they are.

He ultimately concludes, after a tour of EU patent issues:

[M] in Brussels seem not to understand that we are in a global economic battle in which, as Chinese Prime Minister Wen Jiabao has said on many occasions, "future competition in the world will be competition in IP." Many across the EU seem to think that we should weaken IP by pursuing our own set of IP/competition rules, without understanding that this will disadvantage us in the rest of the world and, ultimately, in the EU itself when we have to rely on innovation from the U.S. and Asia. The rest of world -- the U.S., Japan and, yes, China -- are all strengthening their IP regimes. It is economic suicide to weaken ours.

posted by Solveig Singleton @ 8:40 AM | Antitrust, International, Markets: Business, Investment & Innovation

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