One point of criticism is the huge backlog of patents that have yet to be processed by the USPTO. At one point, the backlog was more than 700,000 patents as of 2009. The backlog is considerably lower now, due to new procedures at the patent office. According to an article by Mike Masnick at TechDirt, the backlog reduction has little to do with higher quality patents and a greater rate of rejection. In fact, the USPTO has lowered their standards to facilitate the approval of a greater number of patents.
Masnick says that there are few if any incentives for patent examiners to reject patents. Worse, there seems to be no such thing as a truly final rejection of a patent application - applications are routinely re-submitted in the hopes of wearing the examiners down. In 2001, the approval rate was close to 100%. In 2009, it was about 90%. There is no doubt that many of these patents are vague, overly broad and harmful to downstream innovation.
It seems that the USPTO has become a rubber stamp, approving patent applications rather than taking up the fight to defend their rejections.
In America, we have 3 branches of government: legislative, executive and judicial. During the 20th century, American government relied more and more upon administrative agencies and did so for a good reason. Administrative agencies keep the courts clear so that citizens could get justice without resorting to legal process. Unfortunately, our USPTO has decided that rejecting patents is not worth the fight, deferring to the courts to figure out if a patent is valid or infringed.
There is a problem with that. The rules of evidence in patent law are tilted so far in favor of patent holders, that there is more incentive to settle a patent suit than to fight it. Worse, there are so many patents that it's expensive to do a search of patents before you embark on creating a new product. And here's the kicker: patents are intentionally written in broad, vague language to ensnare as many infringers as possible.
It has often been said that government regulation can be bad for the economy. Maybe so, but I don't see anyone identifying patents as a form of regulation. Jefferson is said to have reluctantly approved of the idea of those "embarrassing monopolies" known as patents. He said that a patent system is fine as long as patents are approve rarely and only with very good reason.
It is time to recognize patents as a form of private regulation enforced by government. Considering the success of free software and other forms of collaboration, it seems that the cost of patents are not worth the incentives they provide to innovate. Given the rate of innovation where people freely collaborate together, I think its time we abolished patents.