Richard Posner Gets It Wrong | Hoover Institution

The underlying criticism is that this so-called “patent thicket” places serious obstacles in the path of many innovative companies by allowing a “patent troll” to obtain legal protection for innovations that they do not make, solely to block others from using that technology without first receiving a license from the firm that patents.

The troll objection is wildly overstated. There is nothing wrong with a firm that specializes in developing technologies for licensing to others. That is just a sensible form of market specialization, in which the force for innovation comes from one firm, often with a single idea and modest capital, which hopes to reap hefty profits by issuing non-exclusive licenses to companies that can then incorporate this patent into their business models. An attack on the division of labor seems bizarre, especially when launched in the name of economic efficiency.

via Richard Posner Gets It Wrong | Hoover Institution.

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