Question

According to "The Experts: Does the Patent System Encourage Innovation?" what is a key problem with companies pursuing patents specifically to hinder, or prevent, competition?

Answer 1

The key problems are the patent trolls.

The so called patent trolls buy or obtain patents cheaply from companies that are struggling and need any money they can get. Then the trolls use the patents as legal weapons to threaten legal action to those they argue infringe their patents. The trolls are not interesting in manufacturing a new product  (from the patent they obtained) or coming up with new ideas how to use it. This way they are useless to invention and economy.

The alleged infringer has to pay a licensing fee which can be very high. Some of the patent infringement claims are baseless and may stifle the company's production thus hinder development of a new product.

Patent trolls buy a huge number of patents and then they misuse the patent system to shake down companies with their alleged claims. This way they limit and prevent competition as companies are afraid their new product has already been claimed by trolls.

Answer 2

According to the article, when companies earn patents specifically to prevent competition, it hinders the innovation of products that might actually be better. For instance, Bruce Nolop describes how his company had to pay more attention to the "minefield of existing patents than on the expected value that we could bring to customers." Rosabeth Moss Kanter suggests a "use it or lose it" solution to this problem. She thinks that a company that patents an item would be forced to use the patented idea or product or risk losing the patent. This idea would encourage more competition and prevent patent abuse.