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The intent of the patent system is to incentivise innovation and promote the sharing of the results of that development at the end of the patent’s life. The granting of a patent by the state offers a time limited monopoly to the inventor to sell the product of that invention, in exchange for this monopoly , the company agrees to disclose the details of the invention. The basic principle of the patent system is a fair proposal, if you have put in effort and risk to developing something, it is then reasonable that you receive compensation for this. The state intervenes and creates a time-limited monopoly on the behalf of the inventor to protect their investment of time and incentivise others to invest in innovative development. The creation of a monopoly is something which first principle market capitalism abhors, and is not taken lightly, it can introduce market distortions which pull a given market far from being the “perfect market”. The benefit to society in this case comes from the development of a body of published patents which can be studied and developed upon or licensed by others. Previous to the development of patents, specialised technical knowledge was jealously kept within the ranks of mediaeval guilds, with the real danger of losing knowledge or skills if it was not transmitted to the next generation.
