Function and Performance of the Patent System

Author: Kou Zonglai
Publisher:
Publish Date: 2005-09-01
Features: Based on an extensive review of existing literature in patent economics, this book reexamines the nature, functions, and performance of the patent system from an economic perspective. The patent system is a crucial guarantee for technological innovation and progress in contemporary society. Unlike general studies of the patent system that focus on the origins, historical development, legislative status in various countries, and content of patent implementation, this book stands on the premise that "the patent system is a confidential exchange contract provided by social planners to potential innovators" and delves into the relationships between patent protection breadth, cumulative innovation, dormant patents, and patent application behavior, as well as the impact of the patent system on social welfare. Through rigorous mathematical logic, it establishes a basic model to evaluate the functions and performance of the patent system. This book redefines the essence of the patent system, viewing it as a confidential exchange contract provided by social planners to potential innovators, and analyzes its functions and performance accordingly. The book is divided into six chapters. In Chapter 1, we propose three fundamental questions: Why is the patent system needed? What is its operational mechanism? How does the change in the patent system affect social welfare? After conducting a comprehensive yet selective review of existing literature in patent economics, we identify its shortcomings and some unresolved issues. In Chapter 2, we construct a basic model to evaluate the functions and performance of the patent system. In Chapter 3, we examine the relationship between patent protection breadth and patent application behavior. In Chapter 4, following Arrow, we regard innovation as a process of producing and using information products, thereby providing a clear explanation of the "cumulative nature" of innovation: without the relevant information products provided by prior innovations, subsequent innovation cannot be achieved. In Chapter 5, we focus on the issue of dormant patents. In Chapter 6, we take the software market as an example to explore the implementation of intellectual property.