Why Patents Are Good: Everything You Need to Know
Why patents are good is something most agree on in theory but not in practice.3 min read
Why Patents Are Good
Why patents are good is something most agree on in theory but not in practice. Patents offer intellectual property protection for inventions that give the creator a certain time period in which they receive exclusive use of the patent as well as royalties from those infringing on the patent.
Many in the business world have expressed discontent with current patent policy as well, particularly in fields such as software technology which are defined by rapidly developing technology, low research and development costs, and a market that requires agility and flexibility.
Even courts have begun to question whether patents should be universally applicable as they are now, such as with a Judge on the U.S. Seventh Circuit Appeals Court stating that patents may not be required in every sector.
Many analysts and academics have also found that patents, especially in the modern economy, may result in slowing down technological development or creating "patent troll" situations where a patent owner collects royalties without promoting any socially beneficial innovation.
Some even go as far to say that a low level of intellectual protection may be right and just for certain business sectors, such as online music.
One example of recent major patent controversy has been over smartphones. As smartphones have become ubiquitous, many companies that had patents in the original smartphone technology are suddenly finding their original seemingly small patents may entitle them to enormous sums of royalties and damages.
Amid the debate, it is worth remembering that patent policy's goal is to strike a balance between rewarding creators for their research, putting that research into the public knowledge, and promoting overall societal economic growth and technological development.
Even though our modern technological landscape has changed significantly compared to several decades ago let alone a hundred years ago, patents remain important for many industries. Patents protect research and development while also encouraging the sharing of technological information with the rest of society.
The Theory of Patents and Why Strong Patents Benefit Consumers
Patents encourage technological development in a positive way by rewarding significant inventions and innovations with patents rather than small developments.
It is often these major pushes forward that raise society's overall technological progress as well as require a significant amount of research and development costs.
Thereby patents reward those who are willing to risk investing in major research, and as a result, society benefits from encouraging major innovations that are then shared with all.
Furthermore, patents encourage other competitor companies to develop their own technologies to try to compete with the patent owner.
Patents have been rapidly growing in the United States. Look at how many patents have been granted by the USPTO in recent years:
• 2015: 325,979
• 2014: 326,032
• 2005: 157,718
• 1995: 113,834
• 1980: 66,170
Even if another company infringes on the patent owner's patent, they may create an upgraded invention so beneficial that the royalty payments are outweighed by the profit they make from the market, which is essentially how much society values the product. This is an example of how even patent infringement policy may promote economic development.
However, not all patent infringement is beneficial, as sometimes when a large business infringes on a small company's patent, the small company simply lacks the resources to effectively fight back.
The Main Benefit of a Patent
The patent ensures that the patent owner is the main decider for how they will receive compensation for their patent, thereby providing them with a reward from their investment in research that led to the invention.
Generally patents will last for either 14 years or 20 years, depending on the type of patent. During that time the patent owner has a variety of options in deciding what to do with the patent, ranging from selling the patent entirely to licensing it, to using it as part of a product, to doing nothing with it.
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