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Business Government

Abolish Patents to Spark Innovation, Fed Paper Urges

Researchers at the US Federal Reserve Bank of St. Louis say that the patent system should be abolished, SmartPlanet reports. Innovation will come from a patentless, cooperative environment in which technologies and discoveries are shared. In the past few decades patenting has exploded—but not because of increased innovation. Instead, there has been more patent litigation among dying firms that don’t actually produce marketable products. Large tech companies like Google have been forced to spend money on “defensive patents,” which are useless except that they protect against lawsuits. Along with wasting money in legal fees, the “old and stagnant” firms pushing for patent support are preventing new, innovative firms and industries to thrive.

The report comes on the heels of some high profile patent cases, like Apple v. Samsung. The researchers, Michele Boldrin and David K. Levine, both economics professors at Washington University, call for open innovation regulated by markets. They actually point to the software industry as a model: open source software is a perfect example of cooperative innovation turning a profit.

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