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The patent system: End it, don't mend it

From AIDS to Android phones, research shows that intellectual property rights are detrimental to the social good.

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To these direct and visible costs other, most likely larger, hidden costs should be added. These are the legal costs of the patent and copyright system and the social costs of lobbying, rent-seeking, and patent-peddling. While their dollar amount is difficult to quantify, their pervasiveness is in front of us daily.

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Do you remember the threat to shut down the BlackBerry network over a patent dispute? Did you read about yet another company wasting money accumulating a large portfolio of patents with which to defend itself against "trolls"? And for what? If we got more innovative new products, perhaps it would be worth it. But the evidence shows we do not. We get only more legal fights and more congressional lobbying.

Is intellectual property needed as a shield for the weak against the strong? Those of us who have yet to make our name in the media markets should fear obscurity rather than piracy. Nor is intellectual property protection against merciless corporations. Rather, it is a tool these corporations use against the small.

Patents are no real protection

Your patent is simply a ticket to lifelong litigation against a giant. Read up on the story of Philo T. Farnsworth – the inventor of television died a broken man trying to enforce his patent against the monster RCA. Contrast that with Eli Whitney, who after unsuccessfully trying to profit from his patent on the wildly successful cotton gin, gave up on intellectual property, moved on, and made a fortune by inventing the modern factory.

Rather than trying to continually fix the existing system with band-aids, it would be far better to eliminate it entirely. The resulting drastic restructuring of industry would lead to new, more competitive business models – and an environment far more favorable to the small entrepreneur.

Why are we keeping alive a system of legally protected private monopolies that does not deliver on its promises and, instead, generates a vast number of socially damaging activities? The answer seems twofold: legislative and political inertia on the one hand, and vested monopolistic interests exploiting the status quo on the other.

If we wish to innovate our way out of the current economic crisis, we must start by dismantling the myth of intellectual property, and then search for a system of property rights capable of genuinely fostering innovation and productivity.

David K. Levine and Michele Boldrin are professors of economics at Washington University in St. Louis, and the authors of "Against Intellectual Monopoly."


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