James E. Bessen and new Nobel winner Eric Maskin maintain that the software, semiconductor, and computer industries have seen considerable innovation with little patent protection. When patents were granted to these industries starting in the 1980s, they demonstated no R&D increases or productivity gains. Here is the paper .

Thanks to Alex Tabarrok at www.marginalrevolution.com.

So, does that mean that there is a possible compromise that could be pushed on these grounds? (Assuming we can't get rid of the monopolies all together).

Assume that the number of approved patents that depend on a given patent approximates the sequentialism associated with that invention. Change the law so that the validity period of a patent is shortened for one year for every new patent that is approved that depends on the patent (in question) up to a minimum of, say, 2 years.

This way, there would be an incentive to develop new ideas based on patents by others (you get the ideas on public domain faster) and the innovating companies should push for more and newer and more important innovations to maintain their monopolies (instead of sitting in their heels for all 20 years with a patent).

Innovations that are singular (i.e. do not provoke a number of incremental improvements) would receive the full patent protection length and those that create a big number of sequential small step innovations would receive a relatively short protection.

What do you think?

Your proposal is an improvement over the current situation.

I do not think it is an improvement over our proposal on this blog, which is to abolish intellectual monopoly altogether (conveniently, you have ruled this out by assumption :P).

I don't have to explain to you why firms have an incentive to keep innovating without intellectual monopoly.

I think, given the reality that patents impose significant costs on society and have been shown to produce very little innovation, we have to loosen the assumption that patents are a good idea in general.

Therefore, the question is not "How can we preserve the patent system in face of these objections?" but the question is "In what case, if any, will patents be a good idea?" and as a provisional solution pick the free market, since it's the best alternative we know of so far.

:)

I agree with you that abolishing intellectual monopolies is the best solution. I'm sure you've thought about this, but how do you propose we get there? Do you focus mainly on turning the heads of your fellow researchers, or how? I really would like to see how it might be possible.

I'm just a kid, not a researcher. I wish. I'm calling it "our proposal" because I agree with it.

The best I can think of to change this is activism. Start a cult, recruit converts, and use your market power to gain a foothold for the free market. If you can manage to successfully compete, by virtue of such a community being able to produce more efficiently, you can grow and force monopolies - they won't be monopolies anymore - out of the market. Of course this requires a great deal of "me-too" innovation. And some altruism.

Another option is to wait until the intellectual monopoly system collapses by itself; either because it becomes unworkable or because social support vanishes. Although it is arguably already an unworkable system with little social support.

Anyone have a better idea?