Your argument works only if those who patent stuff are (i) better stuffers than most, and (ii) wouldn't have stuffed without patents. This is difficult to measure, because patents hinder those who want to build on your stuff (you want a cut, so it's more expensive to them). For instance, if ARM didn't have the monopoly over its designs, maybe people would step up and do the same work for free. The best analogy I can think of is free software, most notably GNU and Linux.
On the other hand, maybe ARM wouldn't have designed any chip at all. I don't think that would be a problem however. Technology tends to happen no matter what. Independent inventions of non-obvious stuff at roughly the same time are common. I don't know why, but it seems that when an idea is "ready", it just pops out of some earthling's head. (Citation badly needed, please.)
The idea to directly reward innovators is seductive, but I think it puts too much focus on the individual. Society as a whole doesn't need to reward something that would happen anyway. That would be a waste of resources. Not to mention the hoops you have to jump through to maintain an artificial reward system (the legal side of patents an copyright is quite expensive).
Your argument assumes that the world of "stuff" resembles GNU/Linux. Very broadly useful things that lots of people have the expertise to contribute to, where the costs of contribution are low.
Most stuff doesn't look like that. Nobody is designing transmission power control loops in their free time, nor are they designing chemical processes to remove impurities from natural gas before combustion. You gotta pay someone to do that, and it's very expensive to do so.
Also, patents are often construed as a reward for innovation, but I don't think that's the only way to look at them. I think a better way to look at them is like other abstract types of property, e.g. stock in a company. Patents, like stock, allow division of labor and specialization. Nobody is designing high-performance CPU cores in their spare time, but Samsung could pay someone to do it. Without patents, they'd keep the design a trade secret, and NVIDIA, Apple, etc, would pay someone to make their own designs and keep those as trade secrets too. Patents (and copyright), allow a single company, ARM, to specialize in designing CPU cores, by creating property which can be the subject of transactions between ARM, Apple, Samsung, etc. In such a scenario, the patent isn't a "reward" for innovation, but simply a legal abstraction that makes certain types of business arrangements practical.
> Your argument assumes that the world of "stuff" resembles GNU/Linux. Very broadly useful things that lots of people have the expertise to contribute to, where the costs of contribution are low.
I don't think I have to assume that. Individuals have to limit themselves to such contributions, but companies can make the bigger ones. The question is, would they? I think they would, because I doubt many such investments cannot be paid for without a (temporary) state granted monopoly.
(Now, if you abolished patents overnight, that could spur a sense of loss, which would indeed have a temporary chilling effect on innovation.)
> In such a scenario, the patent isn't a "reward" for innovation, but simply a legal abstraction that makes certain types of business arrangements practical.
Then, I would investigate the value of such business models. Specialization is good, but I think the additional specializations allowed by patents are hitting diminishing returns.
I would also investigate other means to enable such business models. If they can be achieved without patents (your example suggests trade secrets would work too, if Apple, Samsung, etc signed non-disclosures agreement to the same company), then that's one more argument against the patent system: between the patent office, the difficult suits and counter-suits, and the lawyers that work on this full time, the sheer organizational cost to society is substantial. If trade secrets can do the same more efficiently (I think it can in your example), then I say let's kill the unnecessary work!
On the other hand, maybe ARM wouldn't have designed any chip at all. I don't think that would be a problem however. Technology tends to happen no matter what. Independent inventions of non-obvious stuff at roughly the same time are common. I don't know why, but it seems that when an idea is "ready", it just pops out of some earthling's head. (Citation badly needed, please.)
The idea to directly reward innovators is seductive, but I think it puts too much focus on the individual. Society as a whole doesn't need to reward something that would happen anyway. That would be a waste of resources. Not to mention the hoops you have to jump through to maintain an artificial reward system (the legal side of patents an copyright is quite expensive).