> But patents did, and do, work in practice - in fields where they're appropriate, and for a couple of centuries.
Do they really?
Steam engines were pretty much stagnant until James Watt's patents expired.
Nobody in the US could build airplanes until the government made Curtiss and the Wright brothers cooperate with eachother.
Sewing machine manufacturers formed a patent pool that made their monopoly (oligopoly) strong enough that everyone pretty much gave up on innovating until the pool expired.
MPEG-LA seems to be trying to use patents to shut down VP8/WebM.
Electric cars are apparently being held up somewhat by patents on better batteries (so the best option they have is to use lots of laptop batteries).
Monopolies in general make things less available, because the monopoly holder can increase their profits by restricting supply.
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There is some effect whose name I don't remember, where the more different people need to agree to make something happen, the more each overestimates the value of their own contribution. So if I want to build something and need to buy land from one person, that's fine; if I need to buy land from 10 people each will want more than 1/10 what the single guy would want; if I need to buy land from 100 people each will want more than 1/10 what each of the 10 guys will want; and this very quickly makes it impossible to get anything done if people know what your doing since they'll all want more than 1/N of the generated value.
Applying this to patents, it's very hard to get anything done if multiple entities own patents that they can use to block it. So firstly this discourages innovation right off (since there's no point), but also it leads to the people who do have patents forming a patent pool. Which lets them build things covered by the patents, but means there's even less point for outsiders to try to innovate, which also means the insiders are secure enough in their oligopoly that they don't need to innovate either.
So there should be a cycle, innovation (for maybe a year or two?) => patent thicket => patent pool => wait for patents to expire (or something entirely different to come along) => ...