The Patent Policy Debate in the High{Tech World: A Literature Review

Patents have great public visibility these days; questions and opinions abound on the fairness of the patent system, the validity of large amount of patents, and the rights of the “haves ” versus the “have nots”. There are questions around the fundamental nature of the patent system – whether patents are protecting and fostering innovation, or whether they have begun to hurt innovation. In this atmosphere of intense debate, the rhetoric in the academic, regulatory, and policy circles often revolves around a handful of issues, namely: are there too many patents, do patents form non-navigable “thickets”, do these thickets cause a “hold-up ” problem for new innovators and im-plementers, do the royalties that need to be paid for several patents covering a single product stack together to form prohibitive royalty rates, how should reasonable licens-ing terms and damages for patents be defined, etc. However, several of these arguments are fraught with little or no empirical evidence. This review discusses an overview of the literature on the current patent policy debate with the goal of identifying gaps in existing arguments, and areas where further research may benefit this debate.