The patent system does need a reform, I would suggest that anyone who applies for a patent should pay $1 for this patent. This has to be renewed every year, and each time the cost doubles. It won't be too many years until most patents enters the public domain. Same thing for copyrights I think.
Ok, it's a goofy idea that some friends an me thought up while drunk and should probably be refined, but as a general idea I don't think it's that bad.

That's as good an idea as any, but it still doesn't solve the problem with regard to the state enforcement of a monopoly.