US Patent System Helps China Catch Up

Although patent law is supported by many different factions as necessary to incentivize innovation, they are actually slowing down the rate of American innovation and damaging our competitiveness with China. It is right for companies to profit from the ideas that they came up with, but the cost of government-created monopoly makes our current patent system the wrong way to go about this. Our patent system is hurting American innovation through three key mechanisms. Patents diminish the use of the most advanced technology when it matters most. By the time a patent runs out, the technology that it protects is often obsolete, and the years that it could have been developed and grown are wasted. Public patents also provide beautiful instruction manuals that allow China and other nations to reproduce our work. The patent system creates a massive legal burden for anyone who seeks to innovate, as they must constantly determine whether their idea is a safe distance from regulatory-arbitrage-seeking patent trolls. The patent system must decrease in size before our

Patents meant to keep specific ideas within the hands of the creators keep those same ideas out of the hands of those who could use them best. There is no guarantee that the person who comes up with a good technological idea will be able to find its highest value use. Although the patent system rewards discovery, it does so at a great cost by limiting the effective use of that discovery. Ideally the one who discovers something would be able to understand it well enough to implement it in a uniquely beneficial way, but there are countless businesses that might be well positioned to find a better use for ideas than the original inventor. By the time the patents run out, the technology they are protecting is often no longer demanded. Any innovation has countless discoveries that could be made on top of it that are actively limited by this government-granted monopoly for inventors. The market will reward inventors without the patent system, and a reduced patent system might even allow inventors to benefit even more dramatically from their creations. Creators would have expertise that the market would often reward richly when their ideas are utilized more widely and effectively.

It is no secret that China does not respect US patent law. They continually create reproductions of American technology and simply deny that they are doing so when asked about it. The difficult diplomatic relationship between the US and China makes these situations even harder to resolve. The patent system not only defines how China is violating our intellectual property, but it also makes it easier for them to. Patents provide a public database of how the best American ideas are built. With the exception of secret patents, patents let China reproduce our products without guesswork. If only those who could be punished by the US government could see the US patent database, the system would be much more aligned, but countries outside our jurisdiction can see our most important discoveries, and they are benefiting from the free experimentation with them that should be helping out nations. Patents are enabling China to discover the best uses for patent-protected ideas effectively while barring US businesses from doing the same.

The actual enforcement of the patent system creates a huge barrier for innovation and creativity. When people attempt to come up with new technologies, they must constantly not only evaluate whether their idea is fundamentally new, but whether that uniqueness is apparent to regulators. Patent trolls make the situation much more complicated, as they buy old patents and look for opportunities to take other companies to court. Whether or not they are successful, they put a massive burden on innovators. Patent law has a purpose, but 60% of all patent litigation being filed by patent trolls shows how the legislation does more harm than good. Private monopolies are continually framed as dangerous all while the state protects and creates them. It has often been debated whether natural monopolies even exist, but even the possibility of being a monopoly is enough to warrant prosecution. Antitrust law views monopolies as inherently dangerous to industry, but those risks are ignored as new monopolies are willingly created. A hypothetical natural monopoly could simply get out-competed, but these state monopolies have the law on their side as they sue to maintain their position. The patent system would have far more benefit if the US was the only country in the world with our technological capabilities, but China tips the scales to make the system far more harmful than helpful.