Final answer:
Sara holds a patent for a widget she invented, and Sam, who independently invents the same widget, commits patent infringement by selling it without Sara's permission. Patents grant inventors exclusive rights for typically 20 years, encouraging innovation by allowing them to earn monopoly profits during this period. Despite imperfections, patents are fundamental for incentivizing new technological developments.
Step-by-step explanation:
The scenario described involves patent infringement, which occurs when an individual or entity makes, uses, or sells a patented invention without the permission of the patent holder. Patents are a form of intellectual property that provide inventors with exclusive rights to their inventions, typically for a period of 20 years.
The purpose of a patent is to incentivize innovation by allowing inventors to potentially reap monopoly profits from their invention for a limited time, while eventually contributing to the public domain.
In the case of Sara and Sam, Sara holds the patent for a widget she invented, and Sam later independently invents the same widget and begins selling it.
Since Sara has already patented the invention, Sam's actions constitute patent infringement, regardless of whether he knew of Sara's patent or not. The patent law is clear in stipulating that only the patent holder has the exclusive legal right to make, use, or sell the invention for the duration of the patent.
This legal framework is essential for continued innovation and technological advancement. The increase in patent applications from the mid-1990s is attributed to the explosion of the Internet and subsequent technological innovations. However, the system is not perfect; economic studies suggest that inventors receive only a portion of the total economic value of their inventions. Still, without such protection, inventors would face immediate competition and could only earn ordinary profits, which might not provide sufficient incentive for the research and development of new inventions.