A thought on Alex's patent post: Why should I be awarded less monopoly power because I am able to come up with an idea using less resources then someone else. If I felt that I was going to be given a shorter patent life, then I would do everything I could to raise my (perceived) R&D costs. This would clearly be a less efficient use of resources.

Right, Shawn. I haven't read Tabarrok's paper, but I think the solution has to be to grant the patent based on an estimate of what the "reasonable" research costs ought to be. As you say, using actual costs invites gaming.

Making hindsight estimates of the "reasonable" cost of devising some invention sounds like a regulatory nightmare. I can't imagine how it could be done fairly and accurately. Also note that inventors don't always set out to invent some particular widget. Sometimes they just happen to stumble onto something valuable; and it's not unreasonable for the patent system to reward people for stumbling around in the right vicinity.

Ed makes a good point. My view of intellectual property in general is that there is no perfect solution--only choices among imperfect solutions. Of the imperfect solutions, I think that sometimes patents turn out to be one of the worst. I give you business process patents as exhibit A on that score.

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