Profits from (non-chemical) patents vs. legal costs. Via a presentation by James Bessen
Patents are often touted as a measure of innovation. Are they?
Copyright and patents are the capitalization of creativity.. They’re sold as protections for artists and inventors but, in reality, protect publishers and corporations. There’s nothing wrong with that, so far as they are moderated to promote the original goal (better ideas, better stuff). Copyright has gone of the rails, leading to the system being ignored by a generation in the west and most of the developing world.
Patents, also, have become ground for speculators more than inventors and their relative lack in India and China may prove to be an innovation advantage:
Today, lots of investors and innovators in Silicon Valley, maybe the majority, would tell you the patent system is doing the exact opposite of what it’s supposed to. It’s not promoting innovation. It’s stifling it. Because patent lawsuits are on the rise. Patent trolls are on the move. Patent lawsuits are so common now that it’s hard to find even one semi-successful startup in Silicon Valley that has not been hit with a suit, which slows innovation, makes it harder for companies to prosper, hurts our global competitiveness (is this getting big enough for you?), costs us all more money when we buy the stuff these companies sell. (This American Life)
It’s often taken as a tautology, but there’s precious little evidence that patents are correlated with innovation. The only thing they seem to be correlated with is more lawsuits, and legal fees, if that’s a part of the economy you really want to develop.
Am I saying that patents are bad? No. They’re just not an abstract moral good and they’re not a proxy for innovation.
Interesting article on the same:
http://ipwatchdog.com/2011/07/23/angry-birds-developer-sued-by-patent-troll/id=18312/
apple is probably the biggest patent troll out there.
Software patents are certainly bad: at the very least they increase costs without increasing innovation.
Pharmaceutical patents provide an incentive to spend more money on marketing than on R & D so they are, at best a very inefficient way of funding research and are harmful in other ways.