Negative Effects of the Patent System

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1) it is difficultg for honest technology creators to discover patents that might be relevant to the technology in development

2) the system gives inventors the perverse incentive not to search for relevant patents to avoid treble damages

3) the holder of an undiscovered patent can lie in wait until other companies make significant investments based on their patents and then exort large sums of money from the hapless inventor.

Summarized in the paper at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=902646

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