Working paper from the Fed makes a case against the current patent system

Two researchers from the U.S. Federal Reserve Bank of St. Louis have published a paper calling for abolishing the patent system as we know it, calling it an impediment to innovation.

Michele Boldrin and David K. Levine say the evidence suggests that industries are born of competition, not protection of IP, and that the patent explosion over the past few years has not been matched by a corresponding increase in R&D spending, nor in innovation, nor in productivity.

The growth of infringement litigation did not escape the researchers’ strong opinions:  “while patent litigation has increased, few patents are actively used. Patent litigation typically involves dying firms, [which] have accumulated huge stockpile of patents but are no longer able to produce marketable products, suing new and innovative firms.”

Their solution?  “ …abolish patents … and find other legislative instruments, less open to lobbying and rent-seeking, to foster innovation whenever there is clear evidence that laissez-faire under-supplies it.” In other words, let Congress, in their infinite wisdom, resolve the issue.