THE PATENT POLICY DEBATE IN THE HIGH-TECH WORLD

Increases in patent awards and the growing economic importance of innovation have generated a debate among academics and public policy makers about the fundamental nature of the patent system. The debate raises questions regarding the fairness of the patent system, the validity of many types of patents, the rights of the haves versus the have nots, and whether patents are fostering or harming innovation. The debate focuses on a handful of issues: are there too many patents, are there non-navigable patent thickets, do these thickets cause a holdup problem for new innovators and implementers, do the royalties that need to be paid for several patents covering a single product stack together to form prohibitive royalty rates, how should reasonable licensing terms and damages for patents be defined, and so forth. This article examines the economic literature on patent policy with particular consideration of empirical analysis. The article finds limited empirical support for many of the policy concerns about the patent system. The discussion suggests the need for extending and improving empirical analysis of patents and technology standards.