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Essay On Patent Systems

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Law & Regulations (ACE 592) Juhi Tomar 1. Patent systems allows inventors all around the world to file and claim some form of intellectual property as their invention which gives them exclusive rights to make use of this property for a certain period of time (usually 20 years), after which it is available for public use. The inventor must release all details regarding the invention which are needed to utilize the property by experts/professionals in the field. The patent system gives rise to many economic implications such as the increase in innovation due to the incentivization received by the inventors, increase in cooperation among firms in the market and in many cases, decrease in innovation due to broad patents or hoarding of patents…show more content…
Another economic impact of the patent system is the increase in cooperation among different firms in the market which has a vital role in build or buy decisions within companies. Patents serve as a definable and transferrable asset among inventors, adopters and commercializers. Doing so, they form the basis of the market for inventions. A patented invention can be shared among companies through licensing, thus reducing the need for vertical integration which in turn reduces costs, the most common example being Microsoft Office licenses used in almost every company, rather than designing their own similar software like Zoho Corporation, who have their own version of the software. An example of cooperation between firms which influenced build/buy decision would be the cooperation between Coca-Cola and Hewlett-Packard, which involved the usage of HP’s Indigo Digital Printing technology to create millions of new and unique labels for Coca-Cola as part of their new, combined marketing and packaging strategies. Broad patents or the hoarding of patents by a small number of inventors can cause a significant decrease in competition, which greatly affects the innovation and evolution of the market. A good example would be the mobile phone industry with a highly uneven distribution of patents between a small number of companies. The degree of
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