Eric Maskin on Patents

From a letter to the NYTimes:

… in the software industry, progress is highly sequential: progress is typically made through a large number of small steps, each building on the previous ones. If one of those steps is patentable, then the patent holder can effectively block (or at least slow down) subsequent progress by setting high license fees.

Moreover, like any other monopolist, it has the incentive to set such fees.

Thus, in an industry with highly sequential innovation, it may be better for society to scrap patents altogether than try to tighten them.

ERIC S. MASKIN

Cambridge, Mass., Oct. 8, 2012

The writer, a professor of economics at Harvard, is a 2007 Nobel laureate in economics.