http://www.cfr.org/intellectual-property/american-law-patent-nonsense/p28887

The poster child for patents is the pharmaceuticals industry. But, as Richard Posner, a federal appeals court judge, has argued, what works in this sector is not necessarily appropriate in communications, software or elsewhere. Bringing a new drug to market is inordinately expensive, mainly because of the need for large clinical trials. Monopoly rights over new drugs provide a needed spur to invention. And because trials take as long as a decade, the 20-year exclusivity typically granted can mean only 10 years of monopoly profits.

The technology industry is different. No clinical trials are needed, so costs of development are lower and the case for monopoly weaker. Certainly, 20-year exclusivity cannot be justified. But as Michele Boldrin and David Levine observe in a new paper, the right policy for Silicon Valley might be to grant no patents whatsoever. Technology innovators are amply rewarded by the first-mover advantage. In the 16 months between the launch of the iPhone and the appearance of its first Android competitor, Apple shipped more than 5m units. Its share price outperformed the S&P 500 index by 20 percentage points.

If the need for monopoly incentives in the tech industry is doubtful, the cost of granting them is clear. Whereas a drug patent covers one independent product, a technology patent typically covers a building block of a product, such as the look of the icons on a touch screen, to cite one of Apple's complaints against Samsung. By patenting such building blocks, tech groups prevent rivals from using yesterday's inventions to create tomorrow's improved ones. Rather than spurring progress, patents can trip it up.