In recent years, business leaders, policymakers, and inventors have complained to the media and to Congress that today's patent system stifles innovation instead of fostering it. But like the infamous patent on the peanut butter and jelly sandwich, much of the cited evidence about the patent system is pure anecdote--making realistic policy formation difficult. Is the patent system fundamentally broken, or can it be fixed with a few modest reforms? Moving beyond rhetoric, Patent Failure provides the first authoritative and comprehensive look at the economic performance of patents in forty years. James Bessen and Michael Meurer ask whether patents work well as property rights, and, if not, what institutional and legal reforms are necessary to make the patent system more effective.
Patent Failure presents a wide range of empirical evidence from history, law, and economics. The book's findings are stark and conclusive. While patents do provide incentives to invest in research, development, and commercialization, for most businesses today, patents fail to provide predictable property rights. Instead, they produce costly disputes and excessive litigation that outweigh positive incentives. Only in some sectors, such as the pharmaceutical industry, do patents act as advertised, with their benefits outweighing the related costs.
By showing how the patent system has fallen short in providing predictable legal boundaries, Patent Failure serves as a call for change in institutions and laws. There are no simple solutions, but Bessen and Meurer's reform proposals need to be heard. The health and competitiveness of the nation's economy depend on it.
"James Bessen and Michael J. Meurer explode...illusions in their hard-hitting analysis of how patents perform economically. [T]his is an important book, for policymakers, lawyers, scholars and also for universities."--Fiona Reid, Times Higher Education
"The U.S. patent system is not working. It stands accused on all sides of stifling innovation instead of nurturing it. [E]conomist James Bessen and law academic Michael Meurer show that the system no longer provides predictable property rights. They go on to offer solutions based on empirical evidence from history, law and economics."--Harold Wegner, Financial Times
"Bessen and Meurer provide the first comprehensive review of the patent system in more than a generation, bringing together a survey of the available empirical data and a clear statement of the usefulness of and limits to the patents as property model."--Choice
"[R]eaders of Patent Failure may not be sanguine about the likelihood that Congress or other policy-makers even care about, much less rely on, empirical data to inform their decision-making. But this book successfully demonstrates that they should. Ultimately, Patent Failure is a significant contribution to the growing literature on the problems and promise of the US patent system. . . . Patent Failure rewards careful reading and is a book that cannot credibly be ignored by anyone seriously concerned about the fate of the US patent system."--William T. Gallagher, Law and Politics Book Review
"[W]ell-written and well-documented book. . . . [T]heir finding regarding the profitability of patents for patenting firms is the piece de résistance."--Julio H. Cole, Independent Review
Table of Contents:
Chapter 1: The Argument in Brief 1
Chapter 2: Why Property Rights Work, How Property Rights Fail 29
Chapter 3: If You Can't Tell the Boundaries, Then It Ain't Property 46
Chapter 4: Survey of Empirical Research: Do Patents Perform Like Property? 73
Chapter 5: What Are U.S. Patents Worth to Their Owners? 95
Chapter 6: The Cost of Disputes 120
Chapter 7: How Important Is the Failure of Patent Notice? 147
Chapter 8: Small Inventors 165
Chapter 9: Abstract Patents and Software 187
Chapter 10: Making Patents Work as Property 215
Chapter 11: Reforms to Improve Notice 235
Chapter 12: A Glance Forward 254