A key assumption of today’s standard account of patents is that, absent patent protection, all products would generally be purchased in a competitive market. However, the first regularized patent system appeared during the Renaissance in the Venetian Republic, which was a highly regulated economy. In the Venetian economy, many types of products - particularly, artisanal or technological products - could typically be produced and sold only by artisan and merchant guilds. One important exception to the guilds’ monopolies were 'patents,' which initially provided non-guild members - particularly foreigners - the privilege of being able to sell products and practice methods that were otherwise within the sole province of the guilds. Directly contrary to the view that patents tend to diminish competition, patents in the Venetian Republic enabled a new kind of competition from outside of the guild system. This article explores the role patents played in promoting competition in the Venetian Republic. This exploration is important for understanding not only the historical genesis of the patent system, but also in gaining a deeper understanding of the patent system today.
SSRN link here.
According to their account, the patent system in Venice was setup initially to give talented foreigners a chance at competing with the entrenched guilds. The same agency responsible for immigration was also responsible for examining and granting patents.
Meanwhile, in Silicon Valley, we're sending talented immigrants home after we're done educating them.