Friday, January 1, 2016

Patently the problem, with a solution.

IMHO, one solution to better productivity and prosperity for all would be to provide tax cuts for companies based upon the duration of their patents. If a company halves it patents from 20 to 10 years, the tax rate on income from those patents might be halved. If they go to 5 years, it would be a quarter. No patent, no tax. Or something like that.

The patent reality is until recent times, it took nearly 20 years (a generation) for a product to penetrate the marketplace. These days with global internet connectivity, full penetration can take a few weeks in some industries, a few years in others.

The useful lifetime of many patents is far less than 20 years. Modern marketing, distribution, engineering and production capabilities don't require much time at all to achieve market saturation. Once market saturation is reached, constipation by patent rules and work/marketing practices of all sorts starts to take over.

If one opened up the marketplace to a market sensitive patent tax scheme, there would be a lot more innovation and shared prosperity that would be intimately sensitive to each market niche.

As patent times drop, there would be more 'new' and shared ideas to work with. The need for walls of rules to stretch profits for the duration of a patent would dissipate and those most quickly adapting to such changes would be most successful in competing in a much wider open and prosperous marketplace. 

It's also likely that smaller and more nimble companies might be better at adapting to this than the brontosaurus sized companies that currently dominate the world's marketplaces.   The stacks of bucks that are sucked into the current behemoths would likely be shared more evenly across the marketplace and workforce to most everyone's benefit. 

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