If there are no patents, where is the market for ideas?
That would be fine. If your phone was better then the iPhone and sold more units, that would be fine also.
What if my phone isn't better. It's just cheaper because I have a company that is identical to Apple's in every way, sans research department. I keep my costs marginally lower than Apples (by not spending money on expensive research), and therefore produce iPhones at slightly cheaper prices than Apple.
The only way Apple can compete with me, is for them to cut their costs down to my levels - i.e. to scrap their R&D department too.
That's not motivating them to innovate - it's motivating them not to.
In a free capitalist system, no one would be able to make such high profits, because competition would keep prices low.
Why would capitalism stop people making profits?
And reverse engineering a drug, is peanuts. ... Getting past the FDA is the hassle.
You've stated several times on this thread and others that you want to scrap that too.
Under your system, Glaxo will have a board meeting about a new AIDS drug that they are developing. It's got a 10-year research cycle and will cost them $7bn. To recoup the cost in 10-years they'll have to price the drug at $10,000 a pill for ten years.
The Glaxo chairman points out that within a year of launch, Cheap-o-pharm, Glaxo's biggest competitor will have copied the drug and will sell it at the cost of the pill - not the cost of the research - so roughly $10.
Glaxo has two choices - either they can push ahead and try and charge $10m per pill in the first year - but frankly that's unlikely to work - or they can cancel the research because they won't make the $7bn back before cheap-o-pharm has their copy of the drug in the stores.
Result: Glaxo cancels their 10-year research cycle. Society doesn't get an AIDS drug in ten years time costing $10,000, and they don't get one in 20-years costing $10 either.
If Glaxo had patent-protection, they could keep the research program going, they'd be employing people in the US, pushing drug-science further (which leads to indirect medical benefits elsewhere), gets a return on their investment if they succeed (and they don't if they fail - yay capitalism) and society gets an AIDs pill. Sure it's expensive in the short-term to pay for the cost of the research that made it - but it's also cheap in the longer-term because the patent expires!