Are patents bad for innovation? Sure, some sort of legal protection is needed to encourage entrepreneurs to develop new processes and techniques and bring those inventions to market. But when businesses patent obvious or basic innovations, they can effectively curtail competing companies and start-ups from innovating. Tim Lee, a Cato Institute fellow, looks at the latest attempts to patent the obvious in the New York Times (paid subscription required). He writes:
But don’t software companies need patent protection? In fact, companies, especially those that are focused on innovation, don’t: software is already protected by copyright law, and there’s no reason any industry needs both types of protection. The rules of copyright are simpler and protection is available to everyone at very low cost. In contrast, the patent system is cumbersome and expensive. Applying for patents and conducting patent searches can cost tens of thousands of dollars. That is not a huge burden for large companies like Microsoft, but it can be a serious burden for the small start-up firms that produce some of the most important software innovations.
Adrian had similar thoughts about this practice last year.