How did the system of patents encourage innovation and investment?

Answer 1

Patent protection allows inventors to ascribe value to their intellectual property, and ideally derive an income from it. It also gives the companies or individuals funding expensive research a chance at recouping their investment. In pharmaceuticals, for example, research and testing can take many years and many millions of dollars; giving the developer a head start on selling it won't necessarily make all that money back, but it should help.

Without giving the inventors the brief period of monopoly provided by patent protection, there is little chance of being able to derive income from creativity, and therefore little incentive.

Answer 2

Inventing something new costs money, as it usually takes several tries and a lot of research to come up with a design that works as intended.

So when a new invention goes up for sale, part of the price on it goes to make up for the money spent on developing the thing.

Without a patent, anybody could copy an invention as soon as it was made. This would save the copying company a lot of money, as they wouldn't have had to do the hard work needed to figure it out.

When they don't have to cover the developing cost, they can sell the new invention for a lower price, and no one would buy the more expensive original any more. With no one buying the original, there'd be no money for the inventor. No money, no reason to invent anything.

Patents allow the original inventor to make some money on his design, and makes sure that there is good reason to try to invent something tomorrow as well.

Answer 3

Intellectual creations like patents and copyrights also need to be protected like any other physical property. If limited monopoly is granted to creator he will be induced to go for new creations or the improvement of existing creations.

Answer 4

The patent system helped stimulate inventiveness and increased production.