Research on the Relation of the Inventiveness Standard in the Patent Law and R&D Activities

The inventiveness standard in the patent law is termed the ultimate condition for patentability, so the inventiveness standard plays an important significance for R&D activities. A change of the inventiveness standard causes a static effect and a dynamic effect for the profits of firms. The static effect is profits associated with a change of the probability that inventions qualify for patent protection. The dynamic effect is a weighted average of the profits associated with the next patentable discoveries and the economic life of patents. These effects cause the changes of gains of firms, thus affecting their R&D activities. The net effect on the inventiveness standard change depends on the relative strength of the static effect and the dynamic effect. When the two effects are exactly equal, there is a critical inventiveness standard, and R&D activities and the rate of innovation are maximized.