Tuesday, March 13, 2007

New Incentive to Innovation

If independent inventors cannot afford the expenses of patents, perhaps prizes should be used to induce innovation? This approach has been used since the time of the Industrial Revolution, as I discovered when writing a paper that I presented at the Canadian Law and Economics Association at the University of Toronto a few years ago.

The XPrize does exactly this, offering large monetary rewards for specific break-through inventions. In the first round of the XPrize competition to build a private, manned spacecraft, most of the sponsors were able to raise funding to build their prototypes (and working models) by recruiting sponsors who received substantial media attention from their participation.

(Young Inventors was excited to have the Canadian Arrow Team and XPrize competitors present at our second annual conference in Toronto.)

Yet2.com is another site that is a competitive market for technical solutions, as well as a market for stand-alone intellectual property.

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