Patent buyouts proposals assume a functioning patent system
GianCarlo Moschini Patents and Other Intellectual Property Rights Working Paper 01-WP 275 May 2001 Center for Agricultural and Rural Development Iowa State University Ames, Iowa 50011-1070 https://www.card.iastate.edu/products/publications/pdf/01wp275.pdf
Patent buyouts do presuppose a functioning patent system, so in that sense they are not alternative to it. With this scheme the government offers to buy awarded patents, at their private value, say, and then puts the new technology in the public domain. In principle this model could eliminate some shortcomings of the patent system, including the ex post inefficiency due to the monopolistic pricing of patented innovations. But, clearly, a successful implementation of this system relies on the (possibly unwarranted) presumption that the government has the required kind and level of information.