Given how poorly the USPTO has performed thus far, it seems impossible that this could be correctly implemented. Better to err on the side of openness, and abolish them altogether.
It's obvious that there are enormous swathes of innovation in the IT world that either happened or would have happened without patents. Amazon would probably not have thought twice about developing one-click checkout if it hadn't been patentable and it seems perfectly plausible that RIM got the idea for the BlackBerry independently of that troll that sued them.
But there are also some pretty deep stuff that seems less obvious, my favourite example is MP3. I'm no expert in the field, but it does not seem at all obvious to me to compress music like that, and it seems to be the result of a real invention process.
It's clearly in everybody's interest that they publish their codec as widely as possible, rather than make a broke-by-design binary-only distribution. Why should they not be allowed the same protection as, say, Volkswagen inventing a new fuel pump?
Yes, the "invent a cool codec / protocol, live on the royalties" business model would be difficult without patents.
However, there are a lot of very smart people who invent formats and don't patent them. For instance the JPEG format is clever in a very similar way to the MP3 format. In this instance the format was created by companies with an interest in a great format for their devices - cameras for example.
MP3 (well, a lossy music codec of some kind) could have been created by a similar group trying to make music players interoperable. It might have even been created by open-source advocates. Think Ogg-Vorbis, for instance.
I don't think that we'd live in a world with less cool formats if patents were abolished (yay!). If a format is required to solve a problem, it will be created. Open protocols without patents should be encouraged.
I hate this approach to governance. How can we ever hope to run a competent democracy when the citizens of that democracy assume that government can't be improved?
On what do you base the assumption that it is possible for us, or anyone, to run a competent democracy? There's no historical precedent for it; in fact quite the opposite.
Theoretically, it's possible, but in theory communism would work if everyone just did their best to make it work. Reality is different.
Well there are degrees of dysfunction. Compare, for example, the healthcare system of Western European countries to that of the US. I realize this is a charged issue where people have different ideas of how it should work, but for a certain set of goals (maximum coverage, minimum cost), Europe generally does much better than the US. Other things (diversity, productivity, entrepreneurship, I would argue) are done better in the US.
There are obvious and simple ways the patent system could be improved. For example, drug patents already are treated specially, in that they expire quickly--perhaps a similar system could be applied to software patents. Or, exemptions could be made for implementations of patented software that exist for reasons of interoperability or compatibility. Another option would be to enshrine into law the promises companies make not to sue. (As in, the company is not allowed to renege on their covenant not to sue--this is actually probably not really possible from a legal standpoint, but I'm not an expert.)
