Policy relevant research on patent alternatives
Patents often involve weaknesses, such as those concerning knowledge dissemination to the public. Specialists have already suggested that instead of rewarding investors through commercial pathways, inventions could be granted in order to be widely used and focus on further investments in R&D. Various alternatives to patent systems were extensively studied. "Ex ante subsidies" is the granting of subsidies in proportion to the R&D investment and can help restore incentives, since companies normally focus on increasing profits. Nevertheless, information on the future private value of an invention and the related spillovers is difficult to assess beforehand. Additionally, it was found that private R&D subsidised by the public sector performed less favourably compared to inhouse funded R&D. The "ex post rewards" or patent buyouts may overcome these shortcomings, as more information about the social value of the invention is available. Unlike patents, these systems have the potential to increase the incentives for original research and extinguish monopolies. Reward systems could be particularly beneficial for small firms. Within the patent buyout system, several methods for computing the appropriate price have been explored. In cases, where the social impact of an innovation is more important than its commercial value, the reward system should include the sponsoring of research tournaments or research races. A research race allows the specification of quality criteria within variable time, while the research tournament provides capabilities of ever better performance within a limited time. Both of these tools may be useful in resolving potential conflicts between the contractor and the inventor. In addition, these tools may be used to achieve good results in specific low market incentives.
