James Bessen & Brian J. Love • 24 Aug 2013

Make the Patent “Polluters” Pay: Using Pigovian Fees to Curb Patent Abuse

In the wake of several proposed patent reform bills, James Bessen and Professor Brian Love introduce an unconventional approach to discouraging so-called “patent trolls”: levying a Pigovian tax on patent holders by increasing maintenance fees for older patents.  The pair argue that establishing a tiered fee structure for registering patents will reduce the incentives that companies have to hold older patents for the mere sake of bringing infringement claims, and will thus curb patent abuse, all while encouraging new entrepreneurs to bring novel products to the market.