"Against Intellectual Monopoly" by Boldwin & Levine refutes the argument about patents enabling innovation during the industrial revolution. In fact, the innovation on the steam engine itself was stifled by the original Watt patent.
You beat me to it. David K. Levine is a highly regarded economist and game theorist. Boldwin and Levine state that Watt, like many inventors who obtain patents for inventions that were conceived by several people around the same time, was able to take advantage of the legal system because he was well connected. Watts' case illustrates a pattern that was to repeat itself endlessly: a moneyed inventor makes a minor modification to an existing design, and deploys his superior legal and financial resources to obtain a patent. Nice work if you can get it. James Watt spent more than half of his time litigating against other inventors with superior steam engine designs while he held the patent. When Watts' patent expired, he went into business consulting on steam engine operation--a business model similar to open source software consulting today. Marconi had the legal and financial resources to wrest the patent for radio from Tesla. Marconi's innovation was the addition of a ground wire. Tesla was posthumously awarded the patent by the US Supreme Court when Marconi's company sued the United States for the wartime use of radio.
Based on this, it seems that patents in any field tend to retard innovation as opposed to promoting it. Perhaps it's not just the software patent system that needs to be re-evaluated (and possibly scrapped altogether). Can anyone name any cases where patents have, beyond a shadow of a doubt, actually encouraged progress? I'm foreseeing that the pharma industry will be brought up but I will pre-emptively point people to this article as a retort - http://www.theatlantic.com/magazine/archive/2010/11/lies-dam...
I agree. I liked his post and I mostly agreed with his views, except that one that patents enabled the industrial revolution. I don't think that's true at all. I think progress in technology (and in other fields as well) happens by building something and then allowing others to build upon it. Having a patent is not the main reason someone wants to build something or to bring it to market - not even close.
This is a good video on this (about how the steam engine, the light bulb, Ford automobiles, and other breakthrough inventions came to life):
The point of patents was exactly to allow others to build on innovations by rewarding disclosure with a time-limited monopoly. Before there were patents, the only protection against copies was to keep innovations secret, possibly forever while you try to think of a way to exploit them without disclosing them.
It is not entirely clear that patents would help much in that.
If it is not possible to keep something secret, patents would only help if people otherwise really would keep inventions secret. But there are ways to gain even without secrecy -- first-mover advantage, etc. -- and inventors would be attracted to those rather than nothing at all.
If it is possible to keep something secret, then those motivated by the gains from patents would choose secrecy in preference, since secrecy is an even stronger monopoly.
http://www.dklevine.com/general/intellectual/against.htm