Food and discussion begins at 12:30 pm. Everyone invited.
Many contemporary treatments of the patent system begin with Fritz Machlup’s review, damning with faint praise, “If we did not have a patent system, it would be irresponsible, on the basis of our present knowledge of its economic consequences, to recommend instituting one. But since we have had a patent system for a long time, it would be irresponsible, based on our present knowledge, to recommend abolishing it,” and conclude that for all its imperfections, the patent system is still worth keeping. Patent may introduce costs and inefficiencies, this analysis goes, but since patents serve a necessary function as incentives to innovate, we must bear and mitigate their costs.
In the case of software patents, I challenge the incentive side of the equation: Patents do not provide a useful incentive to innovation in the software industry, I contend, because the patent promise ill-suits the engineering and development practices and business strategies of software production. The problem is not merely inefficiency in implementation of software patent, but a structural mismatch between where the incentive applies and how software innovation happens. Even an ideally implemented software patent — well examined, fully disclosed and enabling, properly scoped in light of the prior art — would fail to serve the incentive functions intended by the Constitution, the Patent Act, and standard patent theory.