Nobel Prize Winning Economist Eric Maskin: In Highly Innovative Industries, It May Be Better To Scrap Patents

from the good-point dept

We've talked in the past about how Nobel Prize winning economist Eric Maskin has done research questioning the value of patents in software and in other industries. So it's not surprising -- though still fantastic -- that he's responded to the recent NY Times piece by Charles Duhigg and Steve Lohr that questions the value of our broken patent system. Maskin has sent a letter to the NYTimes arguing that the article did not go far enough:

...the article doesn’t go far enough.

It argues that software patents may reduce innovation because they are too broad, vague and loose — criticisms that are well taken.

But if these were their only shortcomings, then simply tightening patent standards would solve everything. Unfortunately, the problem is deeper than that.

Specifically, in the software industry, progress is highly sequential: progress is typically made through a large number of small steps, each building on the previous ones. If one of those steps is patentable, then the patent holder can effectively block (or at least slow down) subsequent progress by setting high license fees.

His conclusion? In such industries (which, by the way, may go beyond just software), we should probably just get rid of patents altogether:

...in an industry with highly sequential innovation, it may be better for society to scrap patents altogether than try to tighten them.

This view is not new in economics circles, but it's good to see more people realize that the patent system may be doing exactly the opposite of what we're told it does.

Filed Under: eric maskin, innovation, patents, sequential innovation, software patents