Two Views of Innovation, Colliding in Washington

[13 January 2008 - New York Times] As the Senate prepares to tinker with the nation’s patent laws this spring, it’s worth recalling the law of unintended consequences. From the vantage point of a half-century, for example, it’s clear that the formation of Silicon Valley involved serendipity more than intentional design. The co-inventor of the transistor and the founder of the valley’s first chip company, William Shockley, moved to Palo Alto, Calif., because his mother lived there. Moreover, although the transistor was invented at Bell Labs in New Jersey, an antitrust lawsuit during the 1950s forced the AT&T phone behemoth to license the technology openly at a nominal charge. And, the venture capital industry, an important part of the Silicon Valley ecosystem, was given a big boost by Congress in the late 1970s when legislation loosened pension fund regulations — touching off an early wave of high-profile initial public offerings. Now, three decades later, Congress is likely to write legislation that could again reshape the contours of innovation and entrepreneurship for perhaps decades to come, in ways that are hard to predict. More