Our patent system is a mess. It's a fount of expensive litigation that allows aging companies to linger around by bullying their more innovative competitors in court.
Critics have suggested plenty of reasonable reforms, from eliminating software patents to clamping down on "trolls" who buy up patent portfolios only so they can file lawsuits. But do we need a more radical solution? Would we be possibly be better off without any patents at all?
That's the striking suggestion from a Federal Reserve Bank of St. Louis working paper by Michele Boldrin and David Levine, professors at Washington University in St. Louis who argue that any patent system, no matter how well conceived, is bound to devolve into the kind of quagmire we're dealing with today.
Here's the (slightly jargony) core of their argument, which we'll unpack together in a moment:
A closer look at the historical and international evidence suggests that while weak patent systems may mildly increase innovation with limited side-effects, strong patent systems retard innovation with many negative side-effects. Both theoretically and empirically, the political economy of government operated patent systems indicates that weak legislation will generally evolve into a strong protection and that the political demand for stronger patent protection comes from old and stagnant industries and firms, not from new and innovative ones. Hence the best solution is to abolish patents entirely [emphasis mine] through strong constitutional measures and to find other legislative instruments, less open to lobbying and rent-seeking, to foster innovation whenever there is clear evidence that laissez-faire under-supplies it.
In plain-speak, the authors are arguing that, yes, the evidence suggests that having a limited amount of patent protection makes countries slightly more innovative, presumably by encouraging inventors to cash in on their great ideas without fear of being ripped off. But patent protections never stay small and tidy. Instead, entrenched players like intellectual property lawyers who make their living filing lawsuits and old, established corporations that want to keep new players out of their markets lobby to expand the breadth of patent rights. And as patent rights get stronger, they take a serious toll on the economy, including our ability to innovate.