Escalating fees still seems like a great way to limit the damage to small investors while turning the screws on NPEs, though. If the owners of capital can form this monopsony hurting small investors in the escalating fees case wouldn't they be able to do the same in the constant fee case? Is the proposition that they would be able to keep the monopsony together better with a bigger incentive (avoiding potentially high patent fees once they escalate)?

It seems to me that yes it doesn't do much to reduce the use of patents by Big Tech that they are actually commercializing. It would be nice to solve all the problems but it seems like it solves some of the problems that almost everyone but NPEs can agree on in a neat way without too much collateral damage.

Big Tech can afford to spend billions on patent moats for no other reason than to suffocate any small businesses that cannot raise enough capital to pull their heads above the water. An escalating fee scheme, while not wholly responsible for the problem, seems like it adds to it. It’s yet another barrier to entry that contributes to the enormous failure rate of startups.

Well suppose the valuation mechanism for determining the relative value of patents that the escalating fees were levied upon was implemented by requiring IP holders to declare the price at which they were willing to permanently release the discovery into the public domain in exchange for a one-time payment.

The result of such a scheme might be that is nearly always cheaper to pay the patent office to permanently destroy your competitor's patents and release the discovery into the public domain for everyone then it is to hire lawyers to go to court with your competitor in order to obtain a settlement and mutual licensing agreement.

So whenever large tech companies have disputes with each other they might start destroying each other's patent arsenals rather than going to court, which would level the playing field for everyone else. And if a large number of smaller startups were being harassed by a large company they could crowd source the money needed to pay the patent office to destroy the large firm's patents without spending any money on lawyers or legal fees and without having to halt development.

They might be able to afford it, but money is money. The question would be whether the cost of keeping the patent outweighs its potential profits.

The question should be how do we eliminate unnecessary transaction costs and overheads associated with license negotiations, legal fees, and courts costs, and ensure new public inventions can be immediately manufactured by a large number of domestic firms before they are knocked off by foreign manufacturers uninterested in obtaining licenses, while still compensating the original inventor?

A possible solution is to require the patent filers to declare the price at which they are willing to permanently release the invention into the public domain in exchange for a one time payment. Then if someone is sued for IP violation the defendant can crowd-source the inventor's fee and pay it through the patent office to have the the patent destroyed immediately without hiring lawyers or halt production.

The IP registrar could then levy a quarterly maintenance tax on the quit price filed by the IP holder to prevent the inventor's fee from being set infinitely high.