Strengthening IP protections leads to higher costs and stronger monopolies

[Zia, 7/11/18, “Intellectual property, not intellectual monopoly”, ]

Yet the main features of today’s IP regime were established for a very different economy. Patent rules, for example, reflect the long-held assumption that strong protection provides an essential incentive for businesses to pursue innovation. In fact, recent studies by Petra Moser and Heidi Williams, among others, find little evidence that patents boost innovation. On the contrary, because they lock in incumbents’ advantages and drive up the costs of new technology, such protections are associated with less new or follow-on innovation, weaker diffusion, and increased market concentration. This has contributed to growing monopoly power, slowing productivity growth, and rising inequality in many economies over the past couple of decades.

Patents also invite considerable lobbying and rent-seeking. A majority of patents are used not to produce commercial value, but to create defensive legal thickets that can keep potential competitors at bay. As the system expands, patent trolling and litigation soar. Lawsuits by patent trolls comprise more than three-fifths of all lawsuits for IP infringement in the U.S., and cost the economy an estimated $500 billion in 1990-2010.