Factual Errors in Graham’s Lonely Ideas: Can Russia Compete?

1. Losev’s inventor’s certificates. In his portrait of Losev, Graham states that Losev had 16 inventor’s certificates, the Soviet version of a patent. In actual fact, Losev had 10 patents and 6 inventor’s certificates. In 1924 the Soviet government, largely influenced by the concessions policy, enacted a patent law that remained in force until 1931. After the 1924 law was issued, Russians had patent rights. Losev’s ability to sell his radios in the 1920s seems to related to his having had such real patent rights. In 1931 patriotic Soviets were supposed to sign over their past exclusive patent rights to the state and to apply for future invention rights using the inventor’s certificate. Not everybody toed the line, but most did. In 1931 6,071 Soviet citizens received Soviet patents; in 1932, 97 did. From 1939 to 1956 no Soviet citizen received a Soviet patent.

2. Privileges. Most Soviet legal historians considered the Russian "Regulations on privileges for inventions and improvements" (May 20, 1896 [not 1895, p. 119]) to have closely approximated many Western patent laws. Graham states: The tsar as autocrat (samoderzhavets) saw himself as the source of all power, whether wielded directly or indirectly. Therefore, a privilege given to a merchant or inventor was not seen as a right, but a dispensation, a charitable act, something given reluctantly and easily rescinded.” [p.119] The Russian use of the term privilege differs little from the origins of many 19th century European patent systems, which which also were rooted in royal prerogatives to issue monopolies, sometimes called monopoly privileges. Graham seems unaware of this history and attributes more negative significance to the use of the term privilege than is merited.

3. Compulsory working. Graham notes [p. 120] that privileges could be revoked if not “worked” and that the length of protection was shorter than in most other countries. In other words, he believes that Russian patent law was unusually restrictive. However, other countries also insisted that patents be worked (that issue sometimes turned on whether importing constituted working.) The comments on excessively slow processing are also difficult to interpret. These complaints arose in other countries as well.

3. Corruption. The Soviet patent system does present an issue that possibly fits under the rubric of corruption. A patent office should be a truly independent agency, uninfluenced by money or politics. Documents from in the Moscow State Economic Archive spelled out how Soviet officials in the early 1930s devised a special procedure for foreign applications, sending them via secret NKVD channels to relevant Soviet enterprises for input on whether or not to grant the patent and how to narrow the scope of the claims in case the invention was especially important. In other words, the patent office took foreigners’ money for patent applications, but it didn’t give their inventions an objective analysis.

The ultimate effect of this ruse was to discourage foreign applicants for decades. (When interviewed in the 1970s about filing in the Soviet Union, American patent attorneys evinced considerable skepticism about the objectivity of Soviet patent examinations.) The above ruse spills over, perhaps, to the chapter on attitudinal questions: do Russians today believe that any government agency is truly independent? What affect does this ingrained distrust have on forming a new business?

4. Copying. Graham made the following comment in the legal chapter [p.121]: “Gur’ev, openly advocated in the 1880s a policy of illicitly copying the best Western technologies under government protection, a policy that membership in international conventions on patents would have contravened.” This comment isn’t clear. If Graham is asserting that it’s not legal for a Russian to copy an invention that’s patented in Germany, but not in Russia, then he’s wrong. Ironically, Russia would probably have been better off if such copying had been illegal. An analysis of secret Soviet inventions raises the suspicion that legal copying was rampant in the Soviet Union, which, if true, would have hamstrung domestic innovation and created a culture of technological followers.

5. Listing Soviet invention laws. Graham lists the major Soviet invention laws as [p.122]: 1930, 1931, 1941, 1951, 1959, 1961, 1968 and 1973. Soviet jurists cite only the following laws: 1924, 1931, 1941, 1959, 1973 and 1991. Graham’s incorrect list is an unfortunate error, for it undermines his credibility with Russian legal experts. If he gets this wrong, what else is wrong?

He also states that the 1931 law “banned ownership of intellectual property by Soviet citizens.” That’s wrong. [See table A5.8, Annual Number of U.S.S.R. and Russian Federation Patent Grants, 1924-2007, in Martens, John, Secret Patenting in the U.S.S.R. and Russia, pp. 256-257.] Legally Soviet citizens could obtain patents, and some did, but social pressures made such a choice anti-social. Moreover, it was costly for a Soviet inventor to pay the annual patent fees. Ayn Rand draws directly on the text of the 1931 law in Atlas Shrugged, wryly calling author’s certificates Gift Certificates. (Her novel, which stresses the problems of innovation, is actually a critique of the Soviet economy; she unsuccessfully tries to apply these observations to the American economy. [Atlas Shrugged.)]

6. Discoveries and Suggestions. Graham also writes: “Since the goal of the Soviet system of invention law was to advance the government’s interests, the coverage of the law was much broader than in most Western states. Author’s certificates could be given not only for inventions themselves but also for ‘technical improvements,’ ‘rationalization,’ and ‘scientific discoveries.’” That’s wrong. Inventor’s [aka Author’s] certificates were only given for inventions. “Technical improvements” and “rationalizations,” the equivalent to suggestions in company suggestion plans, were handled entirely at the enterprise level and discoveries received formal diplomas. There never was such a unified system as he suggests. It’s true that each was defined in the law, but the administration was quite separate. The discovery appeared largely to accommodate the wishes of Academy researchers, giving them recognition for work that, perhaps, wasn’t churning out stacks of inventor’s certificates that many non-academicians pocketed.

7. Not By Bread Alone. Graham insists that Vladimir Dudintsev’s 1956 novel, Not By Bread Alone, was repressed [p. 123]. It’s not clear what he means. I easily found copies of Dudintsev’s novel on Soviet library shelves and in used book stores (the original 1956 edition and the later 1968 and 1979 editions). Maybe Dudintsev found general disfavor among good writers, but that’s a different issue. The biblical title was, perhaps, provocative, but the book was carefully written to explain the recentralization of inventing management soon to be enshrined in the 1959 law. It’s classic socialist realism, a book to promote Party policies. Dudintsev shows a detailed knowledge of the 1941 law and the problems caused by the abolition of the Committee for Inventing and decentralizing its operations. (Under the 1941 law individual ministries examined and granted inventor’s certificates. Gosplan [State Planning Agency] provided a central registry service.) The novel signaled the Party’s decision to rebuild a centralized invention system and link it with state planning to promote better industrial innovation.

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