Abstract
The paper offers a novel justification for the non‐obviousness patentability requirement. An innovation involves two stages: research results in a technology blueprint, which development transforms into a profitable activity. An innovator, who is either efficient or inefficient, must rely on outside finance for the development. Only patented technologies are developed. Strengthening the non‐obviousness requirement alleviates adverse selection by discouraging inefficient innovators from doing research, but creates inefficiencies by excluding marginal innovations. We show that it is socially optimal to raise the non‐obviousness requirement so as to exclude bad innovators; we also provide several robustness checks and discuss the policy implications.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
