In 1970, the United States recognized the potential of crop science by broadening the scope of patents in agriculture. Patents are supposed to reward inventiveness, so that should have galvanized progress. Yet, despite providing extra protection, that change and a further broadening of the regime in the 1980s led neither to more private research into wheat nor to an increase in yields. Overall, the productivity of American agriculture continued its gentle upward climb, much as it had before.
In other industries, too, stronger patent systems seem not to lead to more innovation. That alone would be disappointing, but the evidence suggests something far worse.
Patents are supposed to spread knowledge, by obliging holders to lay out their innovation for all to see; they often fail, because patent lawyers are masters of obfuscation. Instead, the system has created a parasitic ecology of trolls and defensive patentholders, who aim to block innovation unless they can grab a share of the spoils. An early study found that newcomers to the semiconductor business had to buy licenses from incumbents for as much as $200 million. Patents should spur bursts of innovation; instead, they are used to lock in incumbents' advantages.
The patent system is expensive. A decade-old study reckons that in 2005, without the temporary monopoly patents bestow, America might have saved three-quarters of its $210 billion bill for prescription drugs. The expense would be worth it if patents brought innovation and prosperity. They don't.
Innovation fuels the abundance of modern life. From Google's algorithms to a new treatment for cystic fibrosis, it underpins the knowledge in the "knowledge economy." The cost of the innovation that never takes place because of the flawed patent system is incalculable. Patent protection is spreading, through deals such as the planned Trans-Pacific Partnership, which promises to cover one-third of world trade. The aim should be to fix the system, not make it more pervasive.
One radical answer would be to abolish patents altogether. But abolition flies in the face of the intuition that if you create a drug or invent a machine, you have a claim on your work just as you would if you had built a house. Should someone move into your living room uninvited, you would feel justifiably aggrieved. So do those who have their ideas stolen.
Yet no property rights are absolute. When the benefits are large enough, governments routinely override them — by seizing money through taxation, demolishing houses to make way for roads and controlling what you can do with your land. Striking the balance between the claim of the individual and the interests of society is hard. But with ideas, the argument that the government should force the owners of intellectual property to share is especially strong.
One reason is that sharing ideas will not cause as much harm to the property owner as sharing physical property does. Two farmers cannot harvest the same crops, but an imitator can reproduce an idea without depriving its owner of the original. The other reason is that sharing brings huge benefits to society. These spring partly from the wider use of the idea itself. If only a few can afford a treatment, the diseased will suffer, despite the trivially small cost of actually manufacturing the pills to cure them. Sharing also leads to extra innovation. Ideas overlap. Inventions depend on earlier creative advances. There would be no jazz without blues, no iPhone without touch screens. The signs are that innovation today is less about entirely novel breakthroughs and more about the clever combination and extension of existing ideas.
