Get Innovation, Patent Hold-Up, And Equilibrium Effects Of RAND

Innovation is often sparked and nurtured when there is a clear purpose at play. Asking your child to help solve a challenge, come up with a solution or make something that will genuinely help solve a problem is a sure fire way to light the spark of their creative thinking.

By providing inventors with a temporary period of market power, patents aim to allow inventors to recoup the fixed costs of their research investments.

Patents recognize and reward inventors for their commercially-successful inventions. As such they serve as an incentive for inventors to invent. With a patent, an inventor or small business knows there is a good chance that they will get a return on the time, effort and money they invested in developing a technology.

First, patents and the subsequent patents that cite them provide a useful way to measure innovation performance. Patent data can be used to monitor activities of competitors, form a performance evaluation system in R&D organizations, and identify a specific technological trend.

By granting exclusive rights to a work, the goal of the patent system is to inspire inventors to invest time and money into developing new technologies and products. For a specific amount of time, patenting enables inventors to stop others from producing, utilizing, or selling their creations without their consent.

Patents recognize and reward inventors for their commercially-successful inventions. As such they serve as an incentive for inventors to invent. With a patent, an inventor or small business knows there is a good chance that they will get a return on the time, effort and money they invested in developing a technology.

Patents encouraged innovation and investment because the federal government gave the inventor the exclusive right to develop, use, and sell an invention for a set period of time. Businessmen invested heavily in these new innovations, hoping to create new industries and expand old ones.

Patents stifle innovation when they create too much competition. By protecting and granting exclusive rights to an invention, competitors are shut out creating a monopoly. Moreover, patents can create high entry barriers to the market, making it difficult for small-scale inventors to compete with large companies.