Ex-ante rationales like market reward cannot explain the meaning of patents system (Kesan, 2015). According to Kesan (2015), there are three economic rationales of ex-post of the patents system.
First, patents system creates a basic market for inventors and buyers and make the whole innovation system more efficient. As a matured system, rules about how to apply, how to protect, and how to track these patents already existed. Therefore, when inventors or companies have something new, he can just follow the steps and grand his inventions. This whole system helps patents been used and dismissed in very quick speed and low cost. If there are no patents system, the first thing is to protect this patent to maintain the competitive …show more content…
For example, each patent is documented with a certain form. It is easy to find desired information in these documents so that makes it easy to let people study, used, or commercialized.
Moreover, patents make it possible that every little individual can work together for a big project while keeping everyone’s right on its innovation without mixing it. If without patents, every little piece of the projects cannot be protected, so that it is impossible to let each individual contribute to this projects without protecting on their effort. Especially in today, some big projects need many companies to work together. Hence, the effort each company input represents the benefits they want from it. If no patents system, it is hard to distinguish the benefits.
For example, the smart phone is a creative that have a thousand patents on it. There are many companies contributed on it to make kinds of tiny components and have patents on it. The patents system protects their benefits on each tiny components so that they are willing to put their innovation on the phone. All of these tiny inventions make iPhone became the most popular phone in the …show more content…
In the world, there are so many new techniques being invented every day. How to match your inventions with the potential buyers? Patents can achieve this function by publishing your innovation. Once inventors grind it, they have to publish all the details about their patents. Therefore, everyone can check this patents to see if it fit into their demand. This will reduce the cost to promote the new technique and to find the technique producer desire.
For example, an individual invented a process that can improve the algal lipid, and apply for patents. Then Biodiesel company may see that patents and use it to improve the algal biodiesel productivity since the main materials of biodiesel is the lipid in algae.
Final, patents are useful tools when it comes to financing and bargaining. A patent can be separated between inventors and their inventions. The financing return can be individually obtained from the market while the inventors keep the right on technology. Therefore, a company who own patents can let other companies use their patents by charging a price. In somehow, this can make more profits from the patents. Moreover, patents can be used in bargaining. Some companies can use some patents they own but don’t use to treat other patents in other companies they