A NOTE ON VARIABLE PATENT LIFE.

The article focuses on the need and method of overcoming difficulties during determination of patent life in the United States. According to the article a variable patent life policy should be introduced which may yield different patent lives for different inventions. A patent system which considers the alternatives of additional incentive versus the social cost of monopoly could be one in which patent life is determined so as to insure that the inventor recovers all of his costs plus a fair return on his investment. The key to the estimation of the patent life is the specification of a necessary rate of return. If a firm is earning a competitive rate of r per cent on its investments, then it must also earn a rate of at least r on any research and development undertaking. If the firm cannot earn this return of r, then it will be discouraged from pursuing its interests in the research and development field. A key factor which affects the determination of patent life is the percentage of the total cost, that research and development costs comprise. The value to society of the invention is determined by the conditions under which the new product or process is marketed and the maximum social benefit occurring under perfect competition.