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Paper: Federal Economists Want US Patent System Scrapped

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Economists at the St. Louis Federal Reserve argue that the current U.S. patent system should be scrapped completely to increase inventions and innovation. (Photo by Oli Scarff/Getty Images)

Economists at the St. Louis Federal Reserve argue that the current U.S. patent system should be scrapped completely to increase inventions and innovation. (Photo by Oli Scarff/Getty Images)

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ST. LOUIS (CBS ST. LOUIS) – An economics paper released by two professors working at the St. Louis Federal Reserve argues that the American patent system should be abolished.

Michele Boldrin and David K. Levein — both distinguished professors of economics at Washington University in St. Louis – argue that there’s “no evidence” that the American patent system improves creative productivity.

They go so far to say that the current system has a “negative” effect on American “innovation.”

Boldrin and Levine’s case against patents opens directly: “There is no empirical evidence that [patents] serve to increase innovation and productivity, unless productivity is identified with the number of patents awarded—which, as evidence shows, has no correlation with measured productivity.”

In the paper due to be published in the “Journal of Economic Perspectives” later this year, the two authors suggest that one of the only bipartisan pieces of legislation to pass in 2011 – President Obama’s patent reform proposal – has created a negative political and economic process for patents.

The professors argue that government legislation hurts those working their way up from the bottom.

“The political economy of government-operated patent systems tend to benefit those who own patents are in a good position to lobby for stronger patent protection,” wrote the authors. “But disadvantage current and future innovators as well as ultimate consumers.”

The professors also argue that patents should be measured more from quality than quantity.

Patents have increased dramatically in recent years: In 1983, the U.S. recorded 59,715 new patents that were issued. By 2003, 189,597 patents were issued.

In 2010, 244,341 patents were approved.

“In less than 30 years, the flow of patents more than quadrupled,” wrote the authors. “By contrast, neither innovation nor research and development expenditure, nor factor productivity, have exhibited any particular upward trend.”

Boldrin and Levine say that it is too late to improve patent quality, and instead, the entire program should be scrapped to gain more meaningful innovations in the future.

“Why use band-aids to staunch a major wound?” Boldrin and Levine wrote. “Economists fought for decades — ultimately with considerable success — to reduce restrictions on international trade. A similar approach, albeit less slow, should be adopted to phase out patents.”

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