Has the Academy Led Patent Law Astray?

Prof Jonathan Barnett (USC) has released his new article arguing that we’ve gone too-far — that those arguing for dramatic changes to the patent system did so with “little to no supporting evidence.” [READ IT HERE]. Barnett argues that

Depropertization of the patent system—yields three potential efficiency losses. First, depropertization impedes efficient resource allocation by shifting the pricing of technology assets from the relatively informed marketplace to relatively uninformed judges and regulators. Second, depropertization distorts markets’ organizational choices by inducing entities to undertake innovation and commercialization through vertically integrated structures, rather than contractual relationships now clouded by the prospect of judicial re-negotiation. Third, depropertization may facilitate oligopsonistic efforts to depress royalties on patent-protected inputs, resulting in wealth transfers to downstream entities and discouraging innovation by upstream R&D suppliers.

In the article, Barnett primarily focuses on the idea of a patent thicket and whether these patent thickets have inhibited downstream innovation.  Barnett concludes: “Without a secure expectation of injunctive relief and compensatory damages, false prophecies of too many patents may result in too little innovation.”  Of course this conclusion also rests upon weak empirical ground.