504 SECTIONAL TRANSACTIONS .—F. 
Friday, September 8. 
Prof. ARNOLD PLaNnt.—Economic theory of patent and copyright law 
(10.0). 
There has not so far been sufficient discussion by economists of the 
economic effects of the systems of patents for inventions and of copyright 
for literary and artistic production. ‘Two contrary assumptions have been 
made concerning the relationship between the patent system and the display 
of inventiveness. On one side it is asserted that without patents there 
would be no inventions ; the profusion of innovation in our own time in 
fields which fall outside the range of patent legislation suggests that this is 
unlikely. On the other side it is assumed that the patent system has little 
influence upon the amount of inventing that takes place, but that it serves 
to direct inventing into the fields of greatest social advantage ; an assump- 
tion which in turn conflicts with normal expectations concerning the dis- 
position of the factors of production in a monopolistic regime. 'Thecon- 
ditions making for the display of inventiveness are analysed and the patent 
system is shown to influence the amount of invention of the type that is 
induced by changes in economic conditions. Light is shed upon these 
questions, and upon the relation between variations in prosperity and 
variations in the output of ‘inventions,’ by an analysis of the statistics 
relating to applications for patents in various countries. ‘There are reasons 
for concluding that the patent system results, at least in the short-run, 
in misdirection of the factors of production. ‘The arbitrary and clumsy 
nature of this system of encouraging an infant industry is examined. 
The closely parallel copyright legislation is shown on economic analysis 
to be equally arbitrary in its provisions and lacking in clear basic principle. 
The peculiar treatment of the right of mechanical reproduction of musical 
compositions, under existing English law, is contrasted with the provisions 
relating to literary and artistic works, as compared with the device of the 
“Licence of Right’ in post-war patent legislation. An extension of the 
application of this device would probably reduce the amount of restriction 
of output made possible by this type of legislation. ‘There are, however, 
administrative difficulties. 
Sir ARNoLD Witson, K.C.I.E., C.S.I., C.M.G., D.S.0O., M.P.—The 
effect of Suez Canal dues upon tnter-continental trade (11.30). 
A statistical comparison of the incidence of tolls—both on vessels and on 
cargo passing through the Suez and over the Panama Canals respectively— 
shows that dues levied differ by nearly 334 per cent. in favour of the latter. 
An examination of the figures indicates that the difference is sufficient to 
divert trafic between London and certain Australian and Far Eastern 
ports, and between New York and other ports. 
The method of calculation of the dues in each case is contrasted, and it is 
pointed out that they are based in each case not on the weight or bulk of 
cargo carried, but on the carrying capacity of the ship. This tends to place 
an unduly heavy burden on raw material as compared with manufactured 
goods. 
Monday, September 11. 
Discusston on Technological and economic progress (Mr. R. F. Harrop ; 
Prof. J. A.S. Watson ; Dr. K. G. FENELON) (10.0). 
