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This is the paperback edition of a book originally published in 2004. Notwithstanding its title, the book is only indirectly about innovation, as it focuses on the role that patenting plays in this process, with specific reference to the US institutional system. The main thesis is that the US patent system has badly strayed from its intended role and is currently in dire straights, possibly hindering more than spurring innovation. The symptoms include an explosion in the number of patent applications, very large patent grant rates, and “... a proliferation of patent awards of dubious merit”(p. 12). Concomitantly, there has been a sharp increase in patent litigation, which carries substantial direct cost for the parties involved, as well as indirect cost for the innovation enterprise:“... burgeoning patent litigation is increasingly making lawyers the key players in competitive struggles rather than entrepreneurs and researchers. As the patent system becomes a distraction from innovation rather than a source of incentive, the engine of technological progress and economic growth begins to labor”(p. 13). The authors trace the origin of the current US patent system troubles to two changes introduced by Congress: the creation in 1982 of the Court of Appeal for the Federal Circuit (CAFC) as the only competent forum for judicial appeal of district courts’ decisions on patent matters, and the change in the way the US Patent and Trademark Office (USPTO) is funded (from an agency funded by tax revenue to one funded by the fees it collects) implemented in the early 1990s. It is argued that the latter made patent rights too easy to get, whereas the former strengthened patent rights …