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Do Patents Discourage Innovation? Yeah. But So What.

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Yes, conclude Boston University Law School Professors (and economists) Michael Meurer and Jim Bessen. According to Patently-O's summary,

"the pair has compiled a tremendous amount of economic data regarding patents and companies who patent. ... Meurer & Bessen's bottom line: On average, the patent system is bad for innovation. They agree innovator firms often profit from their own patents. However, the pair's data shows that the innovator firms are also the ones most likely to be targeted by other patent holders. (litigation, licensing, etc.) In today's system, they find, the disincentives created by other people's patents outweighs the incentives to build your own portfolio. I.e., on average, the patent system discourages innovation."

This is not surprising. Also unsurprising, but sad, is that despite their findings, "Meurer & Bessen do not suggest dismantling the patent system — rather, they believe that a number serious reform measures are needed to shift the balance back to a positive state where patents incentivize innovation." Yes, what we need is a new Five Year Plan!

Their book, Do Patents Work?, will be out in 2008 (Princeton). For now, you can find snippits of the research at the following links:

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