Process of Innovation and Patents

The literature on patents may be listed under three categories. One deals with the legislation and the functioning of the patent system. The second category deals with the rationale of the system. The third area is covered by the literature that uses patents as technical information. Some of the important issues regarding patents and their use are as follows:

a)  To what extent are patents used commercially? If patent data are to have any practical value as an indicator of technological change, it is necessary to show that the number of patents, which indeed do lead to innovation, is significant; as a corollary to this, the question pertains to the varying value or quality of the patents. There is also the question of the varying time intervals separating patenting and commercialisation.

b)  If present data pertaining to patenting are used to compare across firms or industries, it is of importance to know whether the patent system is used uniformly by the participants in the comparison. It is possible to protect an invention in several ways, and the attitude towards the use of patents may vary.

c)  In comparisons between countries, there is a question whether the patents institutions can be compared. If patent legislation and the practice of the patent offices vary significantly, this will, of course, affect the validity and usefulness of any comparisons.

d)  Finally, we have the inherent problems of all historical time-series analysis. In our case, we must assume that the institutional framework and the attitudes are relatively stable over time, if we are to have results of any value.