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13.2 How governments can encourage innovation

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By the end of this section, you will be able to:
  • Explain the effects of intellectual property rights on social and private rates of return.
  • Identify three U.S. Government policies and explain how they encourage innovation

A number of different government policies can increase the incentives to innovate, including: guaranteeing intellectual property rights, government assistance with the costs of research and development, and cooperative research ventures between universities and companies.

Intellectual property rights

One way to increase new technology is to guarantee the innovator an exclusive right to that new product or process. Intellectual property rights include patents, which give the inventor the exclusive legal right to make, use, or sell the invention for a limited time, and copyright laws, which give the author an exclusive legal right over works of literature, music, film/video, and pictures. For example, if a pharmaceutical firm has a patent    on a new drug, then no other firm can manufacture or sell that drug for twenty-one years, unless the firm with the patent grants permission. Without a patent, the pharmaceutical firm would have to face competition for any successful products, and could earn no more than a normal rate of profit. With a patent, a firm is able to earn monopoly profits on its product for a period of time—which offers an incentive for research and development. In general, how long can “a period of time” be? The Clear it Up discusses patent and copyright protection timeframes for some works you might have heard of.

How long is mickey mouse protected from being copied?

All patents and copyrights are scheduled to end someday. In 2003, copyright protection for Mickey Mouse was scheduled to run out. Once the copyright had expired, anyone would be able to copy Mickey Mouse cartoons or draw and sell new ones. In 1998, however, Congress passed the Sonny Bono Copyright Term Extension Act. For copyrights owned by companies or other entities, it increased or extended the copyright from 75 years to 95 years after publication. For copyrights owned by individuals, it increased or extended the copyright coverage from 50 years to 70 years after death. Along with protecting Mickey for another 20 years, the copyright extension affected about 400,000 books, movies, and songs.

[link] illustrates how the total number of patent applications filed with the U.S. Patent and Trademark Office, as well as the total number of patents granted, surged in the mid-1990s with the invention of the Internet, and is still going strong today.

Patents filed and granted, 1981–2012

The graph shows the number of patents filed and granted since 1992. While patents filed have increased substantially, patents granted have remained relatively constant in comparison.
The number of applications filed for patents increased substantially from the mid-1990s into the first years of the 2000s, due in part to the invention of the Internet, which has led to many other inventions and to the 1998 Copyright Term Extension Act. (Source: http://www.uspto.gov/web/offices/ac/ido/oeip/taf/us_stat.htm)

While patents provide an incentive to innovate by protecting the innovator, they are not perfect. For example:

Questions & Answers

Three charges q_{1}=+3\mu C, q_{2}=+6\mu C and q_{3}=+8\mu C are located at (2,0)m (0,0)m and (0,3) coordinates respectively. Find the magnitude and direction acted upon q_{2} by the two other charges.Draw the correct graphical illustration of the problem above showing the direction of all forces.
Kate Reply
To solve this problem, we need to first find the net force acting on charge q_{2}. The magnitude of the force exerted by q_{1} on q_{2} is given by F=\frac{kq_{1}q_{2}}{r^{2}} where k is the Coulomb constant, q_{1} and q_{2} are the charges of the particles, and r is the distance between them.
Muhammed
What is the direction and net electric force on q_{1}= 5µC located at (0,4)r due to charges q_{2}=7mu located at (0,0)m and q_{3}=3\mu C located at (4,0)m?
Kate Reply
what is the change in momentum of a body?
Eunice Reply
what is a capacitor?
Raymond Reply
Capacitor is a separation of opposite charges using an insulator of very small dimension between them. Capacitor is used for allowing an AC (alternating current) to pass while a DC (direct current) is blocked.
Gautam
A motor travelling at 72km/m on sighting a stop sign applying the breaks such that under constant deaccelerate in the meters of 50 metres what is the magnitude of the accelerate
Maria Reply
please solve
Sharon
8m/s²
Aishat
What is Thermodynamics
Muordit
velocity can be 72 km/h in question. 72 km/h=20 m/s, v^2=2.a.x , 20^2=2.a.50, a=4 m/s^2.
Mehmet
A boat travels due east at a speed of 40meter per seconds across a river flowing due south at 30meter per seconds. what is the resultant speed of the boat
Saheed Reply
50 m/s due south east
Someone
which has a higher temperature, 1cup of boiling water or 1teapot of boiling water which can transfer more heat 1cup of boiling water or 1 teapot of boiling water explain your . answer
Ramon Reply
I believe temperature being an intensive property does not change for any amount of boiling water whereas heat being an extensive property changes with amount/size of the system.
Someone
Scratch that
Someone
temperature for any amount of water to boil at ntp is 100⁰C (it is a state function and and intensive property) and it depends both will give same amount of heat because the surface available for heat transfer is greater in case of the kettle as well as the heat stored in it but if you talk.....
Someone
about the amount of heat stored in the system then in that case since the mass of water in the kettle is greater so more energy is required to raise the temperature b/c more molecules of water are present in the kettle
Someone
definitely of physics
Haryormhidey Reply
how many start and codon
Esrael Reply
what is field
Felix Reply
physics, biology and chemistry this is my Field
ALIYU
field is a region of space under the influence of some physical properties
Collete
what is ogarnic chemistry
WISDOM Reply
determine the slope giving that 3y+ 2x-14=0
WISDOM
Another formula for Acceleration
Belty Reply
a=v/t. a=f/m a
IHUMA
innocent
Adah
pratica A on solution of hydro chloric acid,B is a solution containing 0.5000 mole ofsodium chlorid per dm³,put A in the burret and titrate 20.00 or 25.00cm³ portion of B using melting orange as the indicator. record the deside of your burret tabulate the burret reading and calculate the average volume of acid used?
Nassze Reply
how do lnternal energy measures
Esrael
Two bodies attract each other electrically. Do they both have to be charged? Answer the same question if the bodies repel one another.
JALLAH Reply
No. According to Isac Newtons law. this two bodies maybe you and the wall beside you. Attracting depends on the mass och each body and distance between them.
Dlovan
Are you really asking if two bodies have to be charged to be influenced by Coulombs Law?
Robert
like charges repel while unlike charges atttact
Raymond
What is specific heat capacity
Destiny Reply
Specific heat capacity is a measure of the amount of energy required to raise the temperature of a substance by one degree Celsius (or Kelvin). It is measured in Joules per kilogram per degree Celsius (J/kg°C).
AI-Robot
specific heat capacity is the amount of energy needed to raise the temperature of a substance by one degree Celsius or kelvin
ROKEEB
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Source:  OpenStax, Principles of economics. OpenStax CNX. Sep 19, 2014 Download for free at http://legacy.cnx.org/content/col11613/1.11
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