Linked by Thom Holwerda on Tue 5th Feb 2013 16:49 UTC
Legal "The case against patents can be summarized briefly: there is no empirical evidence that they serve to increase innovation and productivity, unless productivity is identified with the number of patents awarded - which, as evidence shows, has no correlation with measured productivity. Both theory and evidence suggest that while patents can have a partial equilibrium effect of improving incentives to invent, the general equilibrium effect on innovation can be negative. A properly designed patent system might serve to increase innovation at a certain time and place. Unfortunately, the political economy of government-operated patent systems indicates that such systems are susceptible to pressures that cause the ill effects of patents to grow over time. Our preferred policy solution is to abolish patents entirely and to find other legislative instruments, less open to lobbying and rent seeking, to foster innovation when there is clear evidence that laissez-faire undersupplies it. However, if that policy change seems too large to swallow, we discuss in the conclusion a set of partial reforms that could be implemented." Written by economics professors Michelle Boldrin and David K. Levine, published in the winter issue of the Journal of Economic Perspectives. Via John Siracusa.
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A patent tax system to stop patent abuse
by mkone on Wed 6th Feb 2013 19:42 UTC
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Patents are useful, but companies abuse them because they are relatively cheap to obtain and maintain. So maybe we should make them expensive to obtain and maintain.

I propose a patent tax system. This is how it would work.

The first 10 patent applications made by an individual or a company would attract a nominal "tax" of, say, $100 per patent. So the system allows an individual to have 10 cheap patents per year.

The next 90 patents are a bit more expensive. These would cost $1,000 each. This would allow smaller companies to protect their invention without making it too expensive.

Any other patent costs $100,000 to file.

These fees would also apply when acquiring patents, so if either filed or bought 10 patents in a year, I would pay the government $100 per patent. The next 90 patents bought or filed would incur taxes of $1,000 and the rest would attract the $100,000 tax.

Suddenly, companies would really think twice about submitting 5000 patent applications a year (IBM, I am looking at you!).

A similar tax system could be developed for patents you own. So each patent generates a licensing fee to government. The first 100 patents are license free ($0). The next 900 cost the company (or individual) $2,000 per year (each), and the rest cost you $10,000 per year.

Anything that resembles ownership would be treated as ownership, therefore a company couldn't get away by creating a subsidiary that only owns 10 patents. The owner of the company would be deemed to own those patents, and therefore would be liable for all patents owned directly or indirectly. Exclusive licenses to a patent would be treated in the same way as ownership, with a an initial fee for the exclusive license, and further annual fees for each year in which the patent remains exclusively licensed.

Probably flawed, but this might solve the patent mess.

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