Replace Patents With Prizes To Spur Innovation, Create Savings: R Street
As R Street’s Derek Kanna points out in a recent policy study: “Even when they work properly, patents limit competition by granting a 20-year legal monopoly.7 De jure legal monopolies are able to use the power of the law to extract excess rents from consumers and other firms. In practice, it is not unusual that multiple teams work simultaneously on similar concepts and make similar or iterative discoveries, but only the team that receives the patent enjoys the windfall. The others typically will be barred from bringing their independent invention to market, rendering the research and development invested in such projects sunk costs.”
