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How Patents Encourage Innovation in Technological Development and Dep​loyment​

​Innovation is crucial for the development and deployment of technologies. A widely deployed model to understand technology builds on the concept of the technology life cycle. The life cycle of technologies can be divided into a number of steps – from invention, through RD&D and market development, to commercial diffusion. Different processes can be discerned at each stage of the life cycle and different instruments can be deployed to promote innovation.

One group of such instruments relates to IPR. IPR refers broadly to the ownership of intellectual findings in the industrial, scientific, literary and artistic fields. IPR grants inventors certain exclusive rights over their creations to encourage creative activity for the benefit of society by allowing the inventors a fair return on their investments.

Traditionally, IPR is divided into two groups: industrial property rights and copyright. In general, copyright is a legal term describing rights given to creators for their literary and artistic creations, such as for example, music and paintings, while the term “industrial property rights” is used as a denomination for certain exclusive rights regarding innovative ideas or distinguishing signs or designations in the industrial or commercial field. Industrial property takes a range of forms and includes, among others, patents to protect inventions, trademarks, industrial designs, and commercial names.

Patents can play a prominent role in the entire technology life cycle, from initial RD&D to the market introduction (demonstration to diffusion) stages, where competitive technologies can be protected with patents and licensed out to third parties to expand financial opportunity (Figure 1). 

​The global patenting activity is growing. World Intellectual Property Indicators reported that in 2011, the total number of patent filings worldwide exceeded 2 million for the first time, with a growth rate of 7.8% over 2010 (WIPO, 2012).A patent is the right granted to a patent holder by a state, or by a regional office acting for several states, which allows the patent holder, for a limited period, to exclude others from commercially exploiting his invention without his authorisation. A procedure for patent granting is described in ANNEX I. By granting such rights, patents provide incentives for innovators, offering them recognition for their creativity and enabling them to appropriate the returns of their investment. A patent may be a powerful business tool allowing innovators to gain exclusivity over a new product or process, develop a strong market position and earn additional revenues through licensing.

Patent protection is usually sought at the research and development (R&D) stage of the technology life cycle. Various departments in companies, including research units and specialised lawyers, play a key role in the development of inventions, as well as in the process of preparing and filing patent applications and obtaining, maintaining and exploiting patents. In return for exclusive rights, the inventor must sufficiently disclose the patented invention to the public, so that others can access the new knowledge and can further develop the technology. The disclosure of the invention is an essential consideration in any patent granting procedure. In this way the patent system is designed to balance the interests of inventors and the general public.​
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