The realist in me bets that innovation has only a weak relationship to IP laws, and rather a strong relationship to a certain world-view that fosters innovation since childhood (go USA!)
In the USA, we often hear about how our (USA) school systems are too easy/relaxed compared to foreign countries.
In Thailand, it's the opposite, in the most terrible way possible. Everything is about test scores, and thus "thinking outside the box" is severely penalized.
People in the USA might not have the raw-academics, but the applied problem solving and team collaboration skills absolutely crushes the competition (Though of course that doesn't help manual labor jobs much)
The US economy has been an extreme bastion of innovation for 200 years, while also having a robust patent system (one that has only recently become particularly stifling). In fact I'd argue there has hardly been a greater bastion of innovation in world history than the US economy from 1800 to 2000 or so, very few countries compete for that title.
I'm very much not a fan of how the US patent system works today, but I'm finding it difficult to prove your claim based on historical evidence.
How do you even know that the US has not been innovative despite the patent system. That if the patent system did not exist, it would have progressed even further than it has.
In no way was Adventured arguing that because of the patent system, the US became a bastion of innovation.
As the original comment pointed out, the US has been successful, but it could be for many confounding reasons.
One of the points of patent law is to distribute the rewards of invention, so individual inventors - not corporations - benefit from their creativity.
Patent protections aren't the only element in this, but they're one element, and a lot of 20th century products would never have appeared otherwise.
It's simply not historical to argue otherwise.
The 21st century works differently, but with the irony that the FOSS people claim their way is absolutely correct, and no other system is workable.
Sharing certainly works if you have a day job that pays your bills. But innovation is not invention. Patents were originally designed for creative inventors, not commercial packaging operations like [insert corporate giant here], or freeware mash-up/YetAnotherFramework projects.
In the US at least, the system has become a joke. But just because it's broken doesn't mean that inventors shouldn't be rewarded and protected somehow.
For products where development costs dwarf manufacturing costs, patents provide the incentive to do stuff. Would anyone invest a few billion into a drug if anyone with access to a few million bucks could go manufacture it?
There is a whole 'nother world out there where people make real, actual things.
When the authors of [1] called out Boldrin and Levine on this, the latter responded by fabricating new myths rather than admit that the truth undermined their narrative [2].
The very chapter you cite itself has such inaccuracies. I did not track down all the stuff they cite, but I did find an instance of mischaracterizing references to suit their view points. For instance, when they discuss the German dyestuff industry, they cite a study by Murmann to support their narrative that Germany dominated in that industry due to the lack of patents. But if you look at the actual study itself, Murmann paints (heh) a much more nuanced picture. German dominance in that industry was fueled by close ties with academic research, and later by R&D labs encouraged by, of all things, the newly introduced patent laws:
>When in 1877 German patent law protected dye innovations, a few German firms such as Hoechst, BASF, and AGFA saw the advantage of hiring organic chemists whose sole task was to synthesize new dyes. After these research chemists turned out economically successful dyes, firms hired more and more chemists and pioneered an entirely new corporate function, formally organized research. The birth of corporate research and development (R&D), which today is a standard activity in high-tech industries ... can be traced to the German synthetic dye firms in 1880s. By the 1890s the vast majority of dyes were being discovered in the R&D laboratories of Bayer, Hoechst, and BASF.
> Whereas in the early days of the industry a firm could exist by copying dyes invented somewhere else, patent laws made the systematic application of science within the boundaries of the firm a critical dimension of remaining a leader in the industry.
And elsewhere:
> The most important institution in the early success of the German dye industry was the university system, but patent laws were a second key factor that allowed the German firms to capture a dominant position.
With that many assertions in the study that refute their view, they cherry-pick a few comments and actually cite the study as one that supports their view.
With so many mischaracterizations in there, I find it hard to take anything else they say in that book at their word.
1. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1589712
2. http://econpapers.repec.org/article/bpjrlecon/v_3a5_3ay_3a20...
3. Murmann JP, 2003, "Knowledge and Competitive Advantage – The Coevolution of Firms, Technologies and National Institutions." - http://catdir.loc.gov/catdir/samples/cam041/2003043048.pdf
For companies, patents represent weapons in an arsenal, in which MAD prevents offensive action, as you've said.
For countries, the reverse holds: a country that jettisons its patent architecture, or never evolved a restrictive one to begin with, will be a bastion for innovators. The stable equilibrium is no bad patents - a lack of shallow protectionism - and the only reason patent law in the US has remained constant for so long is because of the other advantages that have given it technological and scientific primacy.
As those advantages erode, patent law will loosen to stimulate competition. Perhaps there is an upside to the perception of decline?