Introduction: The Battle over the Surplus from Innovation

Abstract

Do patents facilitate or frustrate innovation? Our starting point for exploring this question is the recognition that patent systems are products of battles over the economic surplus created by innovation. The features of these systems take shape as contending interests at different points in the production chain seek advantage in any way they can, and consequently they are riven with imperfections. The most interesting intellectual issue is not how patent systems are imperfect, but why historically US-style patent systems with all their imperfections have come to dominate other methods of encouraging inventive activity. The essays that follow this introduction suggest that the creation of a tradable but temporary property right facilitates the transfer of technological knowledge and thus fosters a highly productive decentralized ecology of inventors and firms.