The object of granting a patent is to encourage and develop new technology and industry. The theory upon which the patent system is based is that the opportunity of acquiring exclusive rights in an invention stimulates technical progress in four ways:
(i) that it encourages research and invention,
(ii) in induces an inventor to disclose his discoveries instead of keeping them as a trade secret;
(iii) it offers a reward for the expenses of developing inventions to the stage at which they are commercially practicable, and
(iv) it provides an inducement to invest capital in new lines of production which might not appear profitable if many competing producers embarked on them simultaneously.
Image Source: patentlawcenter.pli.edu
The object of granting a patent is to encourage and develop new technology and industry. An inventor may disclose the new invention only if he is rewarded; otherwise he may work it secretly.
In consideration of grant of monopoly for a limited period, the inventor discloses the details of the new invention and the method of working it so that after the expiry of monopoly period others can use the invention or improve upon it.
The consideration for grant of a patent monopoly are: (i) the working of the invention within the country so as to result in the establishment in the country of a new industry or an improvement of an existing industry which would profitably employ the labour and capital of the country and thus increase the national wealth, and (ii) disclosure to the public of the invention and the manner of its working so that on the expiry of the life of the patent the public are enabled to work the invention themselves and in comparison with each other.
In countries other than India, the terms of patent for all inventions varies from 16 to 20 years whereas in India it was 14 years except for food and drug patents for which the term was five years. By the Patent
Amendment Act, 2002 it increases the term to 20 years. Most of the discoveries and inventions made in the technology in all fields are published in the patent specifications filed at the patent offices of different countries.
A world-wide exchange of technical information has been made possible only by the publication of such patent specifications. But for the existence of patent system which enables the inventors to disclose their inventions without fear of the benefits of their labour being lost to competitors, much of the technological innovations would have remained secret.
The adoption of some kind of patent protection for invention in almost all countries and the ever-increasing number of applications for patents received by the patent offices in all industrially advanced countries in an indication of the universal recognition of the value of a patent system.
The value of the patent system is demonstrated by the fact that in almost all advanced countries the number of patents granted has shown substantial increase.
However, only a small percentage of the granted patents lasts the full term as most of them are either unworkable or have no commercial value or superseded by subsequent inventions.
Quite a number of them are retained for speculative reasons or to prevent competition.
The Patents Act contains provisions against abuse of patent rights by providing for compulsory licensing and even for revoking the patents for non-working.
Besides the publication of the specification enables competitors to experiment and find out ways of designing around the patent, thus encouraging bringing out substitute products for the patented goods.