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March 13, 2008
Nobody puts patents in a corner!
"Many of life's failures are people who did not realize how close they were to success when they gave up." -Thomas Edison
As regular readers know, the author is aware of imperfections in the current patent system in the United States. In that regard, he was very pleased to read about what looks like some good work done by a couple of economists on the patent system. In particular, these economists have studied and offered many insights into the ways in which the patent system is not functioning perfectly as a system of property rights.
What may be missing from a backward-looking analysis, however, are some recent changes in the economic landscape. The biggest of these changes is the Internet. As I pointed out in an earlier post, the emergence of the Internet and digital media technology is having a dramatic effect on the costs of having a patent system (i.e., both the private costs of obtaining and enforcing plus the public costs of the PTO). As transactions costs drop, markets emerge -- even markets for imperfectly defined property rights. Consider the market for secured credit. (Well don't look now.) Sometimes the past is not prologue.
[Note to Bessen and Meurer: I would love to review your book if you'd send me a copy.]
Posted by Michael Martin at March 13, 2008 8:12 AM | The Patent System