Yes, it would create a temporary advantage for companies already holding patents, but they already have an advantage. And in a relatively short period of time (less than 20 years) most of the patents will have expired and that advantage will go away.

But personally, I don't think it's going to scare away many innovators. As it is, many American software patents do not hold in Europe. Despite this, American companies rarely seem concerned that their 'patent disclosures' will be used against them by their European competitors.

I wager this is because they are not truly innovations of the sort that require protection in order to encourage their creation.

20 years? Go back 20 years and look at the software we had then. 20 years is an eternity. Way too long to put up with the chilling effect this would have on new competition in the market. I'm not saying you don't have a point in the long term, but I think there's got to be some sort of middle ground here that can help insure that startups who want to innovate can confidently tell their investors that they aren't going to end up paying all that money just so Google or MS or whomever can copy them.

> a climate where there can't protect their work to the same extent?

Nobody is safe against patents, not even Microsoft, IBM, Google or Apple. And patents are only for 15 years so it's not like you'll have to wait 100+ years like with copyright.

I agree, the current system is flawed too. However, under the "No new software patents" policy, lets say company A has x number of preexisting patents, and a new company wants to get into the field, they can't leverage and of company A's innovations, but company A could use anything company B comes up with however they like. That seems like a dealbreaker for any new company trying to raise capital.

Company B just have to not tell Company A what they come up with. It's called "trade secrets".

If that was all there was to it then nobody would bother to patent anything now.