Is the US Patent System Broken?
One thing that I have recently been thinking about is the patent system. Last year, one of my professors mentioned in passing something about the patent system, and my roommate bought a book (Against Intellectual Monopoly by Michele Boldrin and David Levine) that argued patents and copyrights actually are detrimental to the competitive free market. I will admit that I haven’t sat down and read the book in depth, but it just took a skim to realize that the authors have some very thought-provoking arguments that are at worst very theoretically sound. This got me thinking – there are good arguments both for and against the patent system. What if the system was reformed in such a way that the positives of both viewpoints are highlighted, while the drawbacks are minimized? Hence, this article.
The Original Patent System
The Patent Act of 1790 gave the authority to grant patents to the Secretary of State, Secretary of War, and the Attorney General. The constitutional foundation was Article 1, Section 8, Clause 8 of the Constitution, which provides “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Patents under this early system lasted 14 years and were granted only if an invention was deemed “sufficiently useful and important.” The patent board had broad discretion in decision-making, which often led to subjective rulings. Furthermore, only U.S. citizens were eligible to apply.
Our Current Patent System
Today’s system is governed by the Patent Act, codified in Title 35 of the U.S. Code. It operates under a “first-to-file” framework, granting inventors exclusive rights to make, use, sell, and import their inventions for 20 years from the filing date. To qualify for a patent, an invention must be novel, non-obvious, and useful. Compared to the original system, today’s regime covers a significantly broader scope of inventions.
Arguments for the Patent System
Supporters of the current patent system argue that it incentivizes innovation. By granting exclusive rights, patents encourage individuals and companies to invest in research and development. They also push competitors to invent “around” protected ideas, which can foster further innovation. The requirement for public disclosure advances the broader body of knowledge, often revealing more than trade secrets would. Economically, patents stimulate job creation and attract investment, which is especially vital for startups whose intellectual property may be their only defensible asset. Strong patent protections also help American innovators compete globally by deterring intellectual property theft.
Arguments for Abolishing the Patent System
Critics argue that the patent system often stifles innovation rather than promoting it. Blocking others from building upon patented ideas slows cumulative progress. Worse, some patents are filed with no intention of commercialization, effectively shelving useful ideas. The obligation to invent around existing patents is resource-draining, and the 20-year term can be an excessive delay in fast-moving industries. While the system demands public disclosure, legal jargon and complexity often obscure the information, and many inventions can be reverse-engineered regardless.
Critics also contend that patents have become tools for rent-seeking rather than growth. Large firms can weaponize them for litigation or to maintain monopolistic control, fostering an environment ripe for patent trolls and patent thickets. Startups face barriers to entry, fearing lawsuits from entrenched players. Globally, enforcement of U.S. patents is inconsistent, and infringing parties abroad often face no real consequences. Additionally, many believe there’s sufficient incentive to innovate without patent protection—being first to market and building brand recognition, as companies like Xerox and Google have demonstrated, can be just as powerful.
How I Would Fix It
Both sides make compelling points, and no system will satisfy every stakeholder and critic. However, a reformed patent system that aims to maximize innovation incentives, while minimizing rent-seeking behavior and access barriers, would go a long ways towards finding a middle ground between libertarians and staunch supporters of the patent system as it is today. I took a stab at it, with the goal of ensuring that patents protect ideas with real-world utility, not just legal leverage.
The new system would implement shortened, tiered patent terms. The default term would be seven years from the grant date. Patent holders could extend the term by three years at a time, up to a maximum of sixteen years, by submitting proof of active commercialization or significant public use. Each extension would require new documentation. If a patent is found to be filed in bad faith (e.g. with no intent to commercialize) it would be subject to immediate revocation. A special court or board would accept cases of people alleging that patents were filed in bad faith, and the party bringing the action would have the burden of proving by the preponderance of the evidence that the patent was filed in bad faith. If they can do so, the patent holder must rebut that presumption. Furthermore, even if a patent is filed in good faith, entities holding patents without using them would be barred from seeking injunctions. If an injunction is filed in bad faith, the patent holder would be liable for attorneys’ fees and additional penalties.
The system would retain the first-to-file rule but include new incentives for openness. Inventors who voluntarily place novel and useful inventions into the public domain could receive tax credits or grants. A designated patent board would assess novelty and utility, with an appeals process in which no member from the original review panel may participate in the second round.
To promote equitable access, the fee structure would be adjusted: small businesses and individual inventors would benefit from significantly reduced filing and maintenance fees, while large corporations would pay higher rates. This ensures broader participation and reduces the financial barrier to innovation.
By restructuring term lengths, imposing accountability on non-practicing entities, and providing support for open innovation, the reformed patent system could better serve inventors, consumers, and the broader economy alike — and our government can stop pretending it believes in the free market and put its money where its mouth is.