The conventional defense of the patent system is that it is essential in order to stimulate creativity. For example, in "Don't Believe the Hype" (Feb. 2005, IP Law & Business), patent attorneys John Benassi & Noel Gillespie conclude that our patent laws continue to "foster innovation."
This is so even though many observers believe our patent system is "out of control and that overworked patent examiners are issuing overly broad patents."
Costs Must Be Considered
But the benefits that flow from the patent system are only half the story, since the system also comes with costs. Even if we are going to adopt a wealth-maximization criterion (which is, admittedly, problematic), we must compare the costs to the benefits to know whether the system is worth having at all.If costs are not taken into account, there are no limits to what could be done to encourage innovation. Some, for example, suggest replacing the patent system with a federal commission that gives taxpayer-funded rewards to inventors deemed worthy. "Under a reward system, innovators are paid for innovations directly by the government (possibly on the basis of sales), and innovations pass immediately into the public domain. Thus, reward systems engender incentives to innovate without creating the monopoly power of intellectual property rights."
About the author: Stephan Kinsella is an attorney in Houston, director of the Center for the Study of Innovative Freedom, and editor of Libertarian Papers. See his blog.
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| Stephan Kinsella |
Costs Must Be Considered
But the benefits that flow from the patent system are only half the story, since the system also comes with costs. Even if we are going to adopt a wealth-maximization criterion (which is, admittedly, problematic), we must compare the costs to the benefits to know whether the system is worth having at all.If costs are not taken into account, there are no limits to what could be done to encourage innovation. Some, for example, suggest replacing the patent system with a federal commission that gives taxpayer-funded rewards to inventors deemed worthy. "Under a reward system, innovators are paid for innovations directly by the government (possibly on the basis of sales), and innovations pass immediately into the public domain. Thus, reward systems engender incentives to innovate without creating the monopoly power of intellectual property rights."
About the author: Stephan Kinsella is an attorney in Houston, director of the Center for the Study of Innovative Freedom, and editor of Libertarian Papers. See his blog.
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