It won't destroy all incentives to innovation. Hence the word 'monetary'. But if someone can make billions of dollars from innovating, that will certainly be a spur to do it, right?
If you read that NYT article just yesterday on the enormous drag and waste caused by the current state of software patents, you'd sing a different tune. The log line is "software companies now spend more on patents than on R & D".
These particular incentives are warping the IP system out of control. They have huge downsides and now little upside (unless you hit the patent jackpot yourself and are willing to go sleazy).
It need not destroy all incentives to hurt innovation.
There are different factors in different fields. The downsides of software patents far outweigh any upside for innovation and should be done away with. Same for business method patents and most trade dress patents.
But designing and implementing an effective regime for promoting new pharmaceuticals, or biotech crops, is a different proposition. Unlike software or fashion or business, the products here are extremely expensive to develop and almost trivially easy to reproduce. In the case of pharmaceuticals, patent protection pays not only for the physical development of the drug, but also the trials of its efficacy and safety. (Yes, it's not exactly that simple) There have been proposals for replacing the current system in these cases, but none have struck me as effective or practicable.
The patent system is a wholly artificial creation, and as such, can be shaped to our collective whim. We can throw out software patents and business method patents and all other types of patents that destroy innovation while keeping those types that do fulfill their original purpose. We need not get rid of them all.
These particular incentives are warping the IP system out of control. They have huge downsides and now little upside (unless you hit the patent jackpot yourself and are willing to go sleazy).
It need not destroy all incentives to hurt innovation.