The Trouble With Patents

James Surowicki in The New Yorker:

Patentes2Over the past two decades, the U.S. has taken the view that the stronger patents are, the better. But patents, by their nature, are imperfect. They may encourage innovation, but, by allowing the patent holder complete control of an invention, they also limit it. Patents reward some inventors at the expense of others: more than one person can have an idea, but only one can patent it. That may be why, in a study of a hundred and fifty years of patent protection, Josh Lerner, of the Harvard Business School, found that countries that introduced stronger protections for patents saw no increase in innovation by their citizens. Similarly, in a study of nineteenth-century innovation based on data from two World’s Fairs, Petra Moser, an economist then at Berkeley, found that countries with patent laws (like Britain) did not innovate more than those without them (like the Netherlands and Denmark).

Protecting patent holders’ rights is important, of course, but the system needs to be rigorous in the way it hands out patents—careful not to grant patents for ideas that are obvious, already well established, or too broad.

More here.