On Episode 67 of Hypercritical, excellent and exhaustive complainer John Siracusa presented an argument for entirely ending the patent system. While I agree with him that software patents are a sham, that many other patents stifle innovation (Nest's legal troubles, anyone?), and that many industries would be better off without spending hundreds of millions on legal battles, there are many problems with just abolishing the patent system. John addressed some of them, but he left one gaping issue unmentioned and unrefuted.
Abolishing the patent system would be the largest government seizure of property since 18641. Say what you'd like about the nasty business of patent trolls, but they acquire their war chests by paying inventors for patents. Making those patents worthless is tantamount to busting down the doors of their banks and emptying their accounts. We want to make our country a great place to innovate and do business, but doing so with one hand and robbing businesses with the other runs counter to that.
This is not an easy problem to solve. There are two options:
1) Let existing patents live on, and stop granting new patents.
This option does nothing about all the bogus patents that are out there today. And it would take 14 to 20 years for patents to be phased out, with the legal battles lasting for at least that long while companies tried to milk their patents for all their value. Still, it's a simple long term solution.
2) Compensate patent holders for their loss.
This one is really sticky, but it's a Pareto improvement if you can accurately price them. Consumers (~taxpayers) compensate the companies, and as a result the price of goods drops because the cost of competing becomes lower. Accurately pricing patents is hard, though. Really hard. Most are worth almost nothing, but some are worth millions. With over 100,000 patents issued per year, pricing the active patents becomes its own nightmare. If anyone can come up with a viable scheme to do this accurately and cheaply, it's an incredibly valuable idea. One that they should patent.
If we do kill the patent system, it's going to take at least 15 to 20 years. Or we're going to rob a lot of American business owners. Either way, we're likely to be paying billions of dollars to lawyers for the forseeable future. Do yourself a favor and either become one of them or hire one to file a patent on your next big software idea.
(1) That example also makes clear that such a seizure might, potentially, be an awesome idea. Paying off all the plantation owners for the slaves might have saved a lot of death and destruction, achieved the same end of freedom for enslaved people, and been cheaper than the Civil War. I'm not sure if this was proposed at the time, as my only memory of this idea is based on a college history professor who posed the hypothetical. If there's an academic literature on this, can someone share it with me?
