However, in many areas, the current patent laws end up causing the exact opposite. Software patents are often given as the prime example where patents end up stifling innovation. Frequently, patents are granted for ideas that are not really that innovative. Often the patents are granted when similar ideas had been floating around before. In other cases, many people can come up with the idea independently, but once company manages to patent it first and exclude others from using it. In fact, even if a person is only later able to come up with he idea on his own, why should the initial patent prevent him from using the idea? He was able to discover it without their help, what economic good is served by preventing him from using it? It would be difficult to prove he didn't see the original patent, but the system should be adjusted so only extremely innovative patents are granted.
Another issue with the patent system is the inefficiencies and costs involved. It costs many thousands of dollars to apply for a patent, and then it can take the government years to process the patent. The whole system is slow and inefficient. Patents should have a much higher bar to be granted, but they should also be a quicker, cheaper process.
Recently, some have begun trying out to crowd-sourcing some of the patent review process. Instead of just having inefficient government clerks reviewing the patents, some have begun opening the process to the wider public. This way many people can review the patents to see if they involve any "prior art". This is a good step, but the very definition of the patent needs to change. Even if a patent does not involve prior art, who says the idea is so innovative that others couldn't have thought of it on their own?
Instead of just checking the patents for prior art, I suggest a more radical move. If an idea truly deserves to be patented, then no one else should be able to think of the same idea on their own. To apply for a patent, a person or company would have to submit the problem they are trying to solve, and the general area of the solution they have in mind, which would all be posted to a public site. Their actual solution would be posted privately to the patent site. If no one can suggest the same solution, than the patent is truly innovative and will be granted. But if people can come up with the same solution on their own, then no patent would be granted. Why should there be a patent, when others were able to figure out the same idea?
This would greatly reduce the number of patents that are actually granted, but it would fit with the way ideas are actually discovered. In a recent paper, "The Myth of the Sole Inventor", Mark Lemley demonstrates that most inventions are invented simultaneously by different groups of people working independently of each other. There is little reason why one group should be granted exclusive rights to something that would have been invented anyways. In my proposed solution, they would both be able to submit to one site, and instead of a patent being granted, the idea would become open to the public. The companies would still be encouraged to submit their ideas, whether to get their patent, or to prevent their competitors from patenting the idea.
By having the general public review the patents, people will suggest different ideas, and this will lead to even more innovation. Of course, this will lead to large numbers of submissions, and new methods will be needed to categorize and process all the patent data. In the current system, the patent-reviewers do not even have access to the internet when reviewing patents. In the new system, all patent applications will be well categorized and tagged and have clear semantic data that could be processed by computers. This way, it will be much easier to find related patents, and perhaps even to discover what areas are ripe for new ideas.
The entire patent process would be much quicker and cheaper. Instead of payinggovernment clerks to review the patents, the process would be open to the public. People will compete with each other to suggest solutions to the problems or to find related patents. They're could be some financial incentives, or there could be certain opportunities for suggested ideas to be patented themselves. But people would likely partake in the process without even getting any money, as they do on sites like Wikipedia and StackOverflow.com. However it is done, the whole process will be much faster and cheaper than the current system.Many details of such a system would still need to be worked out. Perhaps it could then be tried out in a small area of software patents. If such an idea succeeds, it could lead to greater innovation, a greater spread of ideas, reduced legal costs, and a true stimulus for the economy.