- Generally failing to reward innovators.
- Encouraging more benefits than it costs to society.
The former is because:
- Generally individuals cannot afford to effectively use the patent process.
- Any innovation usually has a couple of good ideas but requires many other (already patented) building blocks which makes the new innovation unprofitable or impossible to pursue.
- Companies that can afford to file and use patents generally can't realize their new ideas, or if they do, not to the full extent of their promise. (Every company has limited resources and a patent on, say, the mouse has a whole load of possible applications.)
- Technology moves so fast than 20 years is essentially 5 product life cycles.
I would argue that the patent system does nothing at all to deliver value to the consumer.
Generally things are cheapest for consumers when there is a large market of near-homogeneous products, such as consumer televisions - exactly the kind of market patents are designed to stop by the granting of temporary monopolies. Yet in that market (where everyone can build a TV) we see pretty rapid innovation - when I grew up in 1980 we had one black and white TV. Now we can reasonably expect that 3D TVs will be available for twenty bucks before 2020.