Howpatents provide the foundation of the market for inventions

Daniel F. Spulber*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

27 Scopus citations


The article develops a comprehensive framework demonstrating how patents provide the foundation of the market for inventions. Patents support the establishment of the market in several key ways. First, patents provide a system of intellectual property (IP) rights that increases transaction efficiencies and stimulates competition by offering exclusion, transferability, disclosure, certification, standardization, and divisibility. Second, patent transfers constitute what the article terms "the market for innovative control" that provides incentives for efficient investment in invention, innovation, and complementary assets. Third, patents as intangible real assets promote the financing of invention and innovation. The market foundation role of patents refutes the economically incorrect "rewards" view of patents. The discussion considers how economic benefits of the market for inventions should guide IP policy and antitrust policy.

Original languageEnglish (US)
Pages (from-to)271-316
Number of pages46
JournalJournal of Competition Law and Economics
Issue number2
StatePublished - Jun 1 2015

ASJC Scopus subject areas

  • Economics and Econometrics
  • Law


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