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Innovation: Do We Need Software Patents?

Sep 5, 2013 • Behavioral Economics, Businesses, Economic Debates, Economic Growth, Economic History, Economic Humor, Economic Thinkers, Innovation, Labor, Macroeconomic Measurement, Regulation, Tech • 466 Views    No Comments

Should intellectual property be protected?

Thomas Jefferson said not necessarily. “…he who lights his taper at mine receives light without darkening me…” Consequently, “Invention … cannot be a subject of property.”

Somewhat disagreeing, Alexander Hamilton perceived patents as incentives. People were more likely to innovate when they could look forward to the monopoly rights of a patent.

Both men did want to encourage invention. They just disagreed about the impact of being able to own your ideas. While Jefferson sought to narrow the extent of a patent, for intellectual property Hamilton was less concerned.

That takes us to 2013. The media have been telling us about the growing number of software patents that might be too broad and the patent trolls who buy and enforce them. Concerned about abuse, New Zealand lawmakers have been in the news for deciding to prohibit patents for most software.

US software patents have been increasing:

From: The Washington Post

From: The Washington Post

And George Mason economist Alex Tabarrok believes that  innovation is constrained by patents:

From: Marginal Revolution.com

From: Marginal Revolution.com

 

 

Looking at a recent Supreme Court decision,  you can see that the patent debate continues. Narrowing intellectual property rights somewhat, they said that naturally occurring genes could not receive patents. Also looking at patents, the US Congress has expressed concern about “abusive patent litigation.”

Our basic question, though, returns us to Jefferson and Hamilton. Which patent policy best encourages the spread and creation of new ideas?

Sources and resources: Thought provoking (and inexpensive), Alex Tabarrok’s, Launching the Innovation Renaissance presented a plethora of ideas about the history and impact of patents, his blog at marginalrevolution had his napkin graph, and I discovered the Jefferson quote in a patent law lecture. But, if you are interested in New Zealand’s patent initiative, this article will be helpful as will this Washington Post discussion of US patent problems (my source of the patents graph). Then for more on US patent history, this article had lots of detail.

And finally, for smiles, I recommend this 6 minute TED talk on “copyright mathematics.”

 

 

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