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Bessen & Maskin 2000: Sequential Innovation

This article is written by two researcher from MIT and concludes, after giving mathematical models and experimental evidence, that in a dynamic world such as the software industry or consulting industry, firms may have plenty of incentive to innovate without patents and patents may constrict complementary innovation. It concludes that copyright protection for software programs (which has gone through its own evolution over the last decade) may have achieved a better balance than patent protection. This new model suggests another, different rationale for narrow patent breadth than the recent economic literature on this subject.

title:: Bessen & Maskin 2000: Sequential Innovation
source:: http://www.researchoninnovation.org/patent.pdf

some of the most innovative industries today -- software, computers and semiconductors -- have historically had weak patent protection and have experienced rapid imitation of their products.

Far from unleashing a flurry of new innovative activity, these stronger property rights ushered in a period of stagnant, if not declining, R&D among those industries and firms that patented most.

Research on the MacroEconomic Effects of Patents: We try to keep track of economic and other research on the effects of patents.
EICTA: An anonymous patent lawyer speaking in the name of the European software and telecom industry lobby group EICTA claims that this paper is built on old data and inadequate models, but doesn't say exactly what is wrong and how it should be done better.
Clement 2003-03: Creation Myths -- Does innovation require intellectual property rights?: An article that introduces recent economic literature which is sceptical about "intellectual property rights" in general and about software patents in particular. This article also cites the Bessen & Maskin study.