Patent Strategy for Researchers and Research Managers, 3rd Edition

Chapter 2

The Value of Patents

2.1 Exclusivity—The Desired Goal

Patent systems are set up by governments to encourage innovation. In general, patent systems have a central theme: in return for disclosing technical innovations and developments, a government grants the patentee the right to exclude others from practicing these innovations and developments for a certain amount of time. Governments hope other inventors will learn from these technical developments, these patents, and use this learning as the basis for more innovation, therefore improving the economic health of the country and the standard of living.

Patents help enable the creation of economic wealth by providing exclusivity to the inventor. In a sense, the patent system grants a legal monopoly to the inventor. However, this monopoly is not a license to practice an invention, but only the right to prevent others from practicing an invention without permission of the patent owner. For example, an inventor may be able to patent an improvement on a previously patented process. That inventor can exclude anyone else from practicing the improvement; however, if the previous process patent, the one the inventor built on, is still in force, he in turn cannot practice the improvement because the early patent is said to dominate his patent. However, the exclusivity granted by the improvement patent can open the door to cross-licensing of both patents, if the original patentee values the inventor's improvement.

Therefore, the ...