This is the most Communistic reading of the US Constitution I have ever seen. Yeah, put 'em in doungons and let 'em invent for the Progress. It had been tried before somewhere, Comrade, it did not work out.
Nope, the US Constitution only talks about promoting "the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries". In other words, it protects the Progress of Science and Arts, not the inventors! The copyright and patent protections are just a way of ensuring such Progress.
The important corollary is that if the system is failing to do that, the Constitution requires that it be changed.
Well, you could see where is the US innovation today, that has to do somewhat how inventors get gratified for their work,since in most cases they get much less than the lawyer who files the patent with the patent office.
As the CTO of an electronics startup, I would be quite happy to see patents abolished. They are a game at best, and a diversion from really pertinent innovation. As to "what do we have left?", the answer is our wits, our ability to actually execute the great idea, and the effectiveness of the team of people who are going to do it (or not). There is greater value there than in a court fight.
There is a rigorous process to determine what an invention is. It may not be perfect but beats “in my head a long time ago” or “obvious by hindsight” by far. Some engineering options can lead to unexpected results and make a lot of money for the business. These are worth protecting while theories are not. If monopolies don’t explore these options, startups will, and do it with the protection of the US patent law. This is why US is still innovating. It is misguided for engineers to join the chorus for weakening the US patent system. For when that is gone, you will be living in a dorm with anti-suicide net around it.
You hit the nail on the head with "What constitutes an invention?" Something that seems innovative to a layman is often, as you said, just differences in engineering choices, or minor tweaks to an existing invention that are obvious to those skilled in the art but not claimed by the patent on the earlier invention.
In summarizing the problem, I would modify your last sentence as follows: "Protecting solutions to problems that anyone could or already has figured out without assistance distorts the economics for everyone."
I am as opposed as anyone else, to the ridiculousness of many of the much-hyped patent litigation cases. But quite honestly, in this era in which developed countries have gotten away from manufacturing to such a large extent, rights to your intellectual property is pretty much all we have left.
It's easier when your IP ends up in a wigit that you manufacture. The simple fact is, that model doesn't work anymore. So scoff all you like, guys, but what do we have left?
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