That's the wrong metric to look at to asses the effectiveness of the patenting system. The justification for patents is that they facilitate innovation by granting a state-enforced monopoly for a limited window of time at the cost of publicly disclosing your innovation. Thereby creating incentive to pour R&D money into new ideas, and to share those ideas with the public. Under that mission, your example is proof of the effectiveness of patents, not the ineffectiveness. Innovation stagnating on steam engines, and then exploding after the patent expires is an example of this system working as intended.
I'm saying that justification needs strong evidence and it's not there.
Exploding after a patent expires is because the state has granted a monopoly to one person. The steam engine would have been invented without the patent protection.
Look at innovation in software - it's not because of patents. Patents hamper innovation.
I understand the point you are trying to make, I'm just pointing out that the example that you were using is actually one in favour of patents not against. I'm positive that the steam engine would have been invented with or without patents, but it's certainly possible that it's invention was accelerated by strong intellectual property protections. The vast majority of inventions are the product of profit-seeking endeavors, and patents help justify the immense capital required to invent. The idea of the lone inventor building something creating something purely for the joy of it is a romantic image, but not really how invention works (certainly not at scale).
Also, the technological explosion of the steam engine was partly due to public disclosure of the invention's function as required to obtain a patent. No patenting system, no disclosure. And maybe it takes society longer to figure out how the machine actually works, thus delaying innovation. If the patenting process did not exist, perhaps the inventors go to measures to secure their intellectual property themselves by intentionally making the product's inner workings obscured. A world with no intellectual property protection is a world where everyone attempts to hide and obfuscate their innovations from the rest of society. This is not an environment where innovation thrives either.
I'm certainly not trying to make the argument here that the patenting system is flawless or even good. Only that intellectual property protections of some kind or another are, and we shouldn't throw that baby out with the bathwater.
Part of them problem is patents are "one size fits all". the one size being 20 years.
In pharmaceuticals, where getting a drug to market takes a decade and hundreds of millions in investments, it seems to work well enough. The investments wouldn't be made if the investor couldn't get return because all their hard work could just be copied.
But fast moving areas where R&D can literally happen in a garage, take months rather than years, and each step builds upon the ideas in previous steps it's not all clear how patents help, and there pretty clear examples where patents slow things down. Sewing machines were bedevilled by patent thicket, as were aircraft where in World War I the Americans were force to use European designs. The latter was a bizarre outcome given heavier than air flight was invented in the US by the Wright brothers - but them heavily patented by them.
The sewing machine thicket was "solved" by the formation of a monopoly - Singer. The Aircraft thicket was solved by the US government demanding all aircraft patents be forfeited to them. In both cases as soon as the problem created by patents was solved, innovation resumed.
It's possibly true that shorter patents would prove to be a net benefit in fast moving industries, but IMHO the evidence seems pretty clear when your innovation is likely to be superseded by something better in 5 years in a free flowing environment, being able to stall all R&D by 20 years is not at all helpful.
Steam engines are only an example of patents working as intended if there was any value in publishing the ideas - that is, if the knowledge would have remained secret without the patent.
The idea is pretty straightforward. "Little guy" invents something truly novel, investing major time into generating that invention. "Big guy" sees this after the fact, uses existing resources to steamroll little guy.
Okay that's the idea, but do they do that today? It seems that today the more common story is: "big guy" patents everything under the sun before the fact and locks it away in a drawer, while "little guy" actually builds the thing and tries to sell it but gets crushed in the process. Or at least that's the one I hear told more often, maybe it really is the case that patents are promoting innovation. But we can't just assume it's working out like we thought it would.
That's the story we hear often with software patents, but those are relatively new. There's a long history of patents for physical things which may be less obviously detrimental.
FWIW, if I remember correctly, the reason we can even have software patents is because a hedge fund ended up trying to patent their process for categorizing or rating investments, and in their drive to patent a process as opposed to a mechanism, new law was decided. I'm being vague because I don't remember the details enough to be authoritative and don't have the time to look them up, but someone else might be prompted to.
To me, I can see a benefit to physical and software patents both, but I think they have very different effects and should be handled differently. If software patents were genuinely harder to get because they had to actually be complex and novel, and also only lasted 5-10 years, I don't think we'd really have much of a problem. I don't know how to raise the bar on their complexity in a good way though.
That isn't evidence that patents are bad. You also have to know the counterfactual of whether the steam engine would have been invented then if the creator wasn't going to be able to patent it
And further, even if it had been invented five times over, would it have been known about by the right people had the patent not forced a public documentation of the design?
This is a good question to which we can never know the answer. Every time this discussion happens I can't help but think that the solution is to make patents much harder to get and/or last for a shorter time.
Theoretically, without them a big company can just copy or reverse engineer your design and sell it for cheaper than you can make it. In practice, big companies just patent a bunch of vague stuff so that no matter how innovative what you come up with is it will somehow end up covered. I've seen this happen over and over.
That makes it seem like we're far, far over some threshold where patents switch from protecting inventors to preventing inventors from doing much of anything.
