Are patent and copyright laws killing innovation?

There is a lot of debate as to whether the current set of domestic and international regulations regarding intellectual property encourage or discourage innovation. Two economists from Washington University, Boldrin and Levine, recently wrote a book and contribute to an impressive and thought provoking blog outlining their position that intellectual property and patent legislation as currently implemented constitutes a de facto monopoly in the classic economic sense. An article about their book can be found here.

Now, I certainly agree that there is a great deal wrong with the current intellectual property laws, but coming from an entrepreneurial and research background i do not agree with Boldrin and Levine that limiting patents to those that have social value (among other constraints) is the most appropriate fix. In my experience, limiting the term of patents and copyright, as well as requiring a functional prototype would accomplish much the same end results without returning the community to the stifling world of 'trade secrets' that ruled much of our pre intellectual property economic history. The prime motivation in establishing an intellectual property system, after all, is to insure that the rewards folks receive for making information about their inventions public outweigh the benefits to be had from keeping their innovations secret. To forget this is to forget why the intellectual property system was established in the first place.

So to my way of thinking, hard limits on the length of time for which patents and copyright grant legal protection as well as a stringent requirement for functional prototypes would do more to fix the system currently in place than the changes suggested by Boldrin and Levine.