“.... economist, Alex Tabarrok of George Mason University, last year drew a similar curve on a virtual napkin to argue that, beyond a certain point, greater protection for intellectual property causes less innovation. He thinks that U.S. patent law is well beyond that optimal point.” That is, the returns from patents and copyrights are diminishing rather than growing and ultimately can only become a disincentive to innovation.
One piece of evidence that they are already negative is the frequency of patent disputes and the cost of prosecuting or defending them. The law journals are full of such reports, including their huge financial costs.
By their very existence, such costs become a powerful disincentive to investment in producing something new as the threat of litigation becomes an additional hard-to-estimate source of uncertainty.
That this is not a trivial matter in law is the fact that the constitution states that patents and copyrights are justified “to promote the Progress of Science and useful Arts.” If they are not doing that, they are unconstitutional.
