Why are patents important to those who hold them?

2 Answers

pohnpei397's profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted on

Patents are important to those who hold them for two main reasons.

First, patents allow firms to benefit from their own research and development.  They do not have to worry that the time and resources they spend creating new technologies will go to waste because some other firm copies their breakthroughs.

Second, patents can act as barriers to entry in a market.  If a firm holds a patent on a given device, other firms are prevented from entering the market for selling or using that device.  This will be a great benefit to the firm with the patent and may even give it a monopoly.

jesseldridge's profile pic

jesseldridge | (Level 1) Salutatorian

Posted on

Patents are so important because some patents like copyright are essential for protecting the rights of inventors/creators. Without it you will loss incentive to create new processes and original works and thus you will no longer be economies of scale in production.