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Richard Fulmer's avatar

Clothing fashions can’t be patented, yet the fashion industry is profitable.

Another point is that patent laws can be gamed. Drug companies have become adept at extending their patents by making insignificant changes to their products’ molecules, changing the recommended dosages, and changing the delivery methods.

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J.K. Lund's avatar

Nice piece, David, that attacks the core of what patents and intellectual property are: artificial scarcity.

Ideas are non-rival; my use of an idea does not prevent anyone else from using it. Patents create a temporary right to exclude others from using an idea, essentially "enclosing" the ideas "commons" for a time.

The problem with this, however, is not only the deadweight loss bequeathed by this monopoly right, but also the fuzzy boundaries inherent to IP. Unlike land parcels, its hard to define the boundaries of IP, making them ripe for abuse.

We are almost better off abolishing patents entirely, though I am not sure about other forms of IP. There does seem to be some value in trademarks and copyrights, for instance. One idea I have floated is the idea of using Harberger taxation to place a small tax or rental fee on IP. That would allow us to, at least, have a sense of the value and make it open for purchase or licensing, dulling the monopoly value. You might like this: https://www.lianeon.org/p/the-ideas-anticommons

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