An Inventive Step for the Patent System?

Abstract

The inventive step is the critical variable in determining balance between patent costs and patent benefits. Set at the right level it ensures that the knowledge spillovers from new inventions offset the costs of restraining competition. But asking the question "is it obvious?" sets a far lower standard for patent grant than asking "is it inventive?". The author argues that for benefits to offset costs the minimum standard of inventiveness must be a contribution to new knowledge. Without such new knowledge there can be no benefits to justify the cost of the restraint on competition.

Keywords: innovation, patent policy, inventiveness

JEL Classification: O31, O34, K29