With all respect to Knuth, if you really inspect his arguments and assertions they are quite weak or have turned out unfounded.

* emigration? No. U.S.A still has smart minds immigrating

* stifle innovation? No. Innovation still happens, progress is being made

* mathematical/non-mathematical and numerical/non-numerical distinction - Not clearly elaborated

* Limp analogy to to previous edicts (designating PI as 3 and Earth as flat) are category errors

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We now see that the end result of the current patent set up is that it allows those with questionable morals and/or deep pockets to extract rent from the stuff of thought rather than land or housing as was the traditional way.

Is this right or wrong? Only if rent-seeking is right or wrong. The patent system is working exactly as it should be.

Note: I actually think that some algorithms which are of significant invention/discovery could/should be patented (I mean, why not?) but what happens is that many many many stupid algorithms get patented and also large corporations can defend turf by sewing patents in virtual land that they have traversed. Because the systems surrounding patents is equally broken, patents are broken. The original idea to reward inventors for ideas is still valid. We throw the baby out with the bath-water if we do not acknowledge this.

What say you? :)