How do patents encourage innovation?

How do patents encourage innovation?

Posted Mar 6, 2009 17:37 UTC (Fri) by anton (guest, #25547)
In reply to: 451 Group: Microsoft suing TomTom, not Linux, not open source by dlang
Parent article: 451 Group: Microsoft suing TomTom, not Linux, not open source

if you don't include the revenue that companies get from selling items that include their own patents, and the fact that without patents they may not sell as many, if any of those items (due to competition that is prevented by the patent) then you are just cooking the numbers to make your own point.

His argument may not be convincing, but that's far from cooking. If the patent really was innovative, one would expect other companies to license the patent, and there would be significant revenues from licensing.

And that still would not prove that the patent encourages innovation; the products based on the patent would be more expensive, so there would be less and probably fewer products, reducing the benefit of the innovation (that's what a monopoly does for you). If the innovation would have come about without the patent (as most patented innovations have), then the effect of the patent is exclusively negative.

Concerning revenue from "items that include patents they own", how would you count that? There is no way to know if an item "includes" a patent in general. And if that revenue was lower without the patent due to competition, then the consumers of these items or their competition would have paid a lower price, and probably bought more items, increasing the value coming out of the innovation.

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