In principle, they could give a lone programmer or small company that invents something awesome the edge needed to break in to a market dominated by large companies. I consider this to be desirable.
In practice, they're used by large companies to prevent lone programmers or small companies from breaking in to the markets they dominate. I do not consider this to be desirable.
The biggest problem here is the transaction costs. If the costs to get and enforce patents were much much lower (time, money, opportunity cost), then patents would be really good. Only the large corporations have enough cash to enforce patents successfully.
I'm not sure that's the case. I think if patents were cheaper to get and enforce, people would patent more trivial things and sue each other far more often. Look at copyright enforcement as practices by the RIAA and Righthaven.
What really needs to be cheaper and easier is getting invalid patents overturned.
While I agree that the second case is often the norm, I do have one counter-example -- I used to work for Riverbed Technology, a 9 year old company which does WAN optimization and competes against Cisco and Bluecoat, among others. Riverbed is (or was?) generally regarded as the tech leader in the market and its head start is based on a patented compression scheme. There's no question that the patent is a big part of what allowed the company to survive the entrance of 800-lb gorillas into the market and I'm fairly certain that if software patents were abolished today, that algorithm would be in Cisco's WAN solution tomorrow.
I still think the software patent system as it stands now needs serious reform but you know, that saying about a broken clock and all.
....and I would say that if Riverbed didn't provide the equivalent support (lol) as Cisco or didn't have the complete integration solutions that Cisco offers, then Cisco SHOULD win out. If you innovate and you're actually better, then you should win. If not, you should go out of business.
Isn't this what "free market" is all about? You can't have both.
The problem that patents are supposed to be solving is incentivising innovatoion by allowing them to profit from their innovation. The pro-patent argument would be that without patents riverbed would have been less likely to innovate in the first place and the world would have been less well off.
I don't think this is a pro/against free market. Free markets rely on some definition of property rights. This is about making those definitions.
...and that's why I'm a bit of a socialist ;) Textbook free market theories make a lot of idealistic assumptions that just aren't true in the real world. The best product doesn't always win, particularly when your competitor sees easier routes to gaining an advantage than the slow, expensive work of improving its own product via investment in its own R&D.
Governments aren't conscious. Politicans have been convinced to support policys that help large corporations. Whether the politicans do this knowingly in return for campaign donations, or unknowingly because lobbyists convinced them that the patent system is a good idea, is unclear.
The distinction is important, because if it is the latter we just heed to lobby the right people. If it is the former, we just don't have enough money.
In practice, they're used by large companies to prevent lone programmers or small companies from breaking in to the markets they dominate. I do not consider this to be desirable.
They're more trouble than they're worth.