the federal reserve doesn't think there's empirical evidence that patents have positive societal benefits and they think there are very empirical and measurable harms.
this isn't "generally good thing that some people abuse", this is the entire patent system is fundamentally not producing any explicable benefits and significant measurable harm, there is no reason to keep it around.
the scenario about the inventor who comes up with the better lightbulb in his garage doesn't happen. if it does, somebody else copies his idea (it's gotta be fairly trivial for someone to make it in a garage) or opens up their own patent portfolios and finds an overbroad patent that describes some trivial component or practice that is widely used, and drags him into litigation that bankrupts him for the rest of his life.
in software the example would be that you get dragged by someone who has patented "e-commerce on a website" or "software updates over the internet" and the money to have lawyers fight it while you empty your warchest.
no "I would simply..." or "but a law firm would do that pro-bono" is necessary here, either, those are both real-world examples, someone tried to shake down Newegg in 2015 with the e-commerce patent for example. And it worked for a lot of previous victims, none of whom felt like Newegg that it was worth fighting on principle or for direct economic benefit alone.
Patents literally kill companies, and they don't actually produce the intended innovations. And that's the federal reserve saying it. There were debates on ending it in the 50s, and they made the wrong decision.
> 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, on the basis of our present knowledge, to
recommend abolishing it.
The harms have now clearly exceeded the benefits of keeping it. It may not have been worth the trouble of abolishing it in 1958, it is now.
https://research.stlouisfed.org/wp/more/2012-035
this isn't "generally good thing that some people abuse", this is the entire patent system is fundamentally not producing any explicable benefits and significant measurable harm, there is no reason to keep it around.
the scenario about the inventor who comes up with the better lightbulb in his garage doesn't happen. if it does, somebody else copies his idea (it's gotta be fairly trivial for someone to make it in a garage) or opens up their own patent portfolios and finds an overbroad patent that describes some trivial component or practice that is widely used, and drags him into litigation that bankrupts him for the rest of his life.
in software the example would be that you get dragged by someone who has patented "e-commerce on a website" or "software updates over the internet" and the money to have lawyers fight it while you empty your warchest.
no "I would simply..." or "but a law firm would do that pro-bono" is necessary here, either, those are both real-world examples, someone tried to shake down Newegg in 2015 with the e-commerce patent for example. And it worked for a lot of previous victims, none of whom felt like Newegg that it was worth fighting on principle or for direct economic benefit alone.
Patents literally kill companies, and they don't actually produce the intended innovations. And that's the federal reserve saying it. There were debates on ending it in the 50s, and they made the wrong decision.
> 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, on the basis of our present knowledge, to recommend abolishing it.
The harms have now clearly exceeded the benefits of keeping it. It may not have been worth the trouble of abolishing it in 1958, it is now.