An Inquiry into the Standard of Substantive Patent Law Infringement in Cross-Border Constellations
2. Conceptual underpinnings
← 26 | 27 → 2. Conceptual underpinnings
While philosophical19, political20, legal21, and economic22 reasons23 for the ← 27 | 28 → establishment of a patent system have been given over time,24 there is a general, widely accepted understanding that, from a societal point of view, a patent right represents a certain “bargain”25 or a regulatory contract26 that is offered by the state to the patent applicant. Within that bargain, the state provides the successful patent applicant with a time-limited27 exclusivity right and in return the patent applicant discloses a new, inventive technical solution, which is industrially applicable.28
Patents operate as rights within national markets, which are, in the majority of cases, based on private property and freedom of competition.29 The exclusivity ← 28 | 29 → granted by a patent has a limiting effect on competition, which calls for justification.30 Generally, there are two distinguishable streams of approaches as to the reasons for the provision of exclusivity, namely a moral and an economic approach.31 The moral approach stems from the Lockean theory of right to the fruits of one’s labor. The economic rationale32 for the creation of patent protection is based on the recognition that an inventive process results, essentially, in arriving at new technical knowledge. Knowledge, on the other hand, demonstrates characteristics similar to a public good,33 which is non-excludible34 and non-rivalrous.35
Under the assumption that markets are spaces in which rational36 economic agents manage resources with maximum efficiency in order to maximize their ← 29 | 30 → utility, economic theory provides that public goods will be...
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