Cyber Law

Introduction

The computer-generated world of internet is known as cyberspace and the laws prevailing
this area are known as Cyber laws and all the users of this space come under the ambit of these
laws as it carries a kind of worldwide jurisdiction. Cyber law can also be described as that branch
of law that deals with legal issues related to use of inter-networked information technology. In
short, cyber law is the law governing computers and the internet.

The growth of Electronic Commerce has propelled the need for vibrant and effective
regulatory mechanisms which would further strengthen the legal infrastructure, so crucial to the
success of Electronic Commerce. All these governing mechanisms and legal structures come
within the domain of Cyber law. Cyber law is important because it touches almost all aspects of
transactions and activities and on involving the internet, World Wide Web and cyberspace.
Every action and reaction in cyberspace has some legal and cyber legal angles.

Cyber Crime

Cybercrime, or computer-oriented crime, is a crime that involves a computer and a

network. The computer may have been used in the commission of a crime, or it may be the
target. Cybercrimes can be defined as: "Offences that are committed against individuals or
groups of individuals with a criminal motive to intentionally harm the reputation of the victim or
cause physical or mental harm, or loss, to the victim directly or indirectly, using modern
telecommunication networks such as Internet (networks including chat rooms, emails, notice
boards and groups) and mobile phones (Bluetooth/SMS/MMS)".Cybercrime may threaten a
person or a nation's security and financial health. Issues surrounding these types of crimes have
become high-profile, particularly those surrounding hacking, copyright infringement,
unwarranted mass-surveillance, sextortion, child pornography, and child grooming. There are
also problems of privacy when confidential information is intercepted or disclosed, lawfully or
otherwise. Debarati Halder and K. Jaishankar further define cybercrime from the perspective of
gender and defined 'cybercrime against women' as "Crimes targeted against women with a
motive to intentionally harm the victim psychologically and physically, using modern
telecommunication networks such as internet and mobile phones". Internationally, both
governmental and non-state actors engage in cybercrimes, including espionage, financial theft,
and other cross-border crimes. Cybercrimes crossing international borders and involving the
actions of at least one nation state is sometimes referred to as cyber warfare.

Cyber law encompasses laws relating to:

 Cyber crimes
 Electronic and digital signatures
 Intellectual property
 Data protection and privacy

Importance of Cyber Law

 Cyber law is vital because it touches almost all aspects of transactions and behavior on
and concerning the Internet, the World Wide Web and Cyberspace.

 Primarily it may seem that a Cyber law is a very technical field and that it does not have
any attitude to most activities in Cyberspace. But the actual fact is that nothing could be
further than the truth.

 Whether we realize it or not, every work and every reaction in Cyberspace has some legal
and Cyber legal perspectives.

 India introduced the law recently and every law needs some time to mature and grow.

 It was understood that over a period of occasion it will produce and further amendments
will be bring to make it well-matched with the International standards.

 It is significant to realize that we need “qualitative law” and not “quantitative laws”.

 Such crimes may threaten a nation’s security and financial health.

  Issues surrounding this type of crime has become high-profile, mainly those surrounding
cracking, copyright infringement. There are problems of privacy when private
information is lost or intercepted, lawfully or otherwise.

 Cyber crimes can involve criminal activities that are traditional in nature, such as fraud,
forgery, theft, mischief and defamation all of which are subject to the Indian Penal Code.

 The abuse of computers has also given birth to a range of new age crimes that are
addressed by the Information Technology Act, 2000.

Need For Cyber Law

In today’s techno-savvy environment, the world is becoming more and more digitally
sophisticated and so are the crimes. Internet was initially developed as a research and
information sharing tool and was in an unregulated manner. As the time passed by it became
more transactional with e-business, e-commerce, e-governance and e-procurement etc. All legal
issues related to internet crime are dealt with through cyber laws. As the number of internet users
is on the rise, the need for cyber laws and their application has also gathered great momentum.

In today’s highly digitalized world, almost everyone is affected by cyber law. For example:

 Almost all transactions in shares are in demitting form.

 Almost all companies extensively depend upon their computer networks and keep their
valuable data in electronic form.
 Government forms including income tax returns, company law forms etc. are now filled
in electronic form.
 Consumers are increasingly using credit/debit cards for shopping.
 Most people are using email, phones and SMS messages for communication.
 Even in “non-cyber crime” cases, important evidence is found in computers/cell phones
eg: in cases of murder, divorce, kidnapping, tax evasion, organized crime, terrorist
operations, counterfeit currency etc.
  Cybercrime cases such as online banking frauds, online share trading fraud, source code
theft, credit card fraud, tax evasion, virus attacks, cyber sabotage, phishing attacks, email
hijacking, denial of service, hacking, pornography etc. are becoming common.
 Digital signatures and e-contracts are fast replacing conventional method of transacting
business.

Technology per se is never a disputed issue but for whom and at what cost has been the issue
in the ambit of governance. The cyber revolution holds the promise of quickly reaching the
masses as opposed to the earlier technologies, which had a trickle-down effect. Such a promise
and potential can only be realized with an appropriate legal regime based on a given socio-
economic matrix.

Technical Aspects

Technological advancements have created new possibilities for criminal activity, in particular
the criminal misuse of information technologies such as

a. Unauthorized access & Hacking:

Access means gaining entry into, instructing or communicating with the logical,
arithmetical, or memory function resources of a computer, computer system or computer
network. Unauthorized access would therefore mean any kind of access without the permission
of either the rightful owner or the person in charge of a computer, computer system or computer
network.

Every act committed towards breaking into a computer and/or network is hacking.
Hackers write or use ready-made computer programs to attack the target computer. They possess
the desire to destruct and they get the kick out of such destruction. Some hackers hack for
personal monetary gains, such as to stealing the credit card information, transferring money from
various bank accounts to their own account followed by withdrawal of money. By hacking web
server taking control on another person’s website called as web hijacking
b. Trojan Attack:

The program that act like something useful but do the things that are quiet damping. The
programs of this kind are called as Trojans. The name Trojan horse is popular.

Trojans come in two parts, a Client part and a Server part. When the victim
(unknowingly) runs the server on its machine, the attacker will then use the Client to connect to
the Server and start using the Trojan.

TCP/IP protocol is the usual protocol type used for communications, but some functions
of the Trojans use the UDP protocol as well.

c. Virus and Worm attack:

A program that has capability to infect other programs and make copies of itself and
spread into other programs is called virus. Programs that multiply like viruses but spread from
computer to computer are called as worms.

d. E-mail & IRC related crimes:

1. Email spoofing

Email spoofing refers to email that appears to have been originated from one
source when it was actually sent from another source. Please Read 

2. Email Spamming

Email "spamming" refers to sending email to thousands and thousands of users -

similar to a chain letter.

3. Sending malicious codes through email

E-mails are used to send viruses, Trojans etc through emails as an attachment or
by sending a link of website which on visiting downloads malicious code.
 4. Email bombing

E-mail "bombing" is characterized by abusers repeatedly sending an identical

email message to a particular address.

5. Sending threatening emails

6. Defamatory emails

7. Email frauds

8. IRC related

Three main ways to attack IRC are: clone attacks, and flood attacks.

e. Denial of Service attacks:-

Flooding a computer resource with more requests than it can handle. This causes the resource to
crash thereby denying access of service to authorized users.

Cyber Stalking

Cyber stalking is the use of the Internet or other electronic means to stalk or harass an
individual, group, or organization. It may include false accusations, defamation, slander and
libel. It may also include monitoring, identity theft, threats, vandalism, solicitation for sex, or
gathering information that may be used to threaten, embarrass or harass.

Cyber stalking is often accompanied by real time or offline stalking. In many

jurisdictions, such as California, both are criminal offenses. Both are motivated by a desire to
control, intimidate or influence a victim. A stalker may be an online stranger or a person whom
the target knows. They may be anonymous and solicit involvement of other people online who
do not even know the target.
 Cyber stalking is a criminal offense under various state anti-stalking, slander and
harassment laws. A conviction can result in a restraining order, probation, or criminal penalties
against the assailant, including jail.

Types

1. Stalking by strangers

According to Joey Rushing, a District Attorney of Franklin County, Alabama, there isn't
a single definition of a cyber stalker - they can be either strangers to the victim or have a
former/present relationship. "[Cyber stalkers] come in all shapes, sizes, ages and backgrounds.
They patrol Web sites looking for an opportunity to take advantage of people."

2. Gender-based stalking

Harassment and stalking because of gender online is common, and can include rape
threats and other threats of violence, as well as the posting of the victim's personal information.
It is blamed for limiting victims' activities online or driving them offline entirely, thereby
impeding their participation in online life and undermining their autonomy, dignity, identity, and
opportunities.

3. Of intimate partners

Cyber stalking of intimate partners is the online harassment of a current or former romantic
partner. It is a form of domestic violence, and experts say its purpose is to control the victim in
order to encourage social isolation and create dependency. Harassers may send repeated insulting
or threatening e-mails to their victims, monitor or disrupt their victims' e-mail use, and use the
victim's account to send e-mails to others posing as the victim or to purchase goods or services
the victim does not want. They may also use the Internet to research and compile personal
information about the victim, to use in order to harass him or her.
 4. Of celebrities and public persons

Profiling of stalkers shows that almost always they stalk someone they know or, via
delusion, think they know, as is the case with stalkers of celebrities or public persons in which
the stalkers feel they know the celebrity even though the celebrity does not know them. As part
of the risk they take for being in the public eye, celebrities and public figures are often targets of
lies or made-up stories in tabloids as well as by stalkers, some even seeming to be fans.

In one noted case in 2011, actress Patricia Marquette quit Face book after alleged cyber
stalking. In her last post, Marquette explained that her security warned her Face book friends to
never accept friend requests from people they do not actually know. Marquette stressed that just
because people seemed to be fans did not mean they were safe. The media issued a statement that
Marquette planned to communicate with fans exclusively through her Twitter account in the
future.

5. By anonymous online mobs

Web 2.0 technologies have enabled online groups of anonymous people to self-organize
to target individuals with online defamation, threats of violence and technology-based attacks.
These include publishing lies and doctored photographs, threats of rape and other violence,
posting sensitive personal information about victims, e-mailing damaging statements about
victims to their employers, and manipulating search engines to make damaging material about
the victim more prominent. Victims frequently respond by adopting pseudonyms or going offline
entirely.

Experts attribute the destructive nature of anonymous online mobs to group dynamics,
saying that groups with homogeneous views tend to become more extreme. As members
reinforce each others' beliefs, they fail to see themselves as individuals and lose a sense of
personal responsibility for their destructive acts. In doing so they dehumanize their victims,
becoming more aggressive when they believe they are supported by authority figures. Internet
service providers and website owners are sometimes blamed for not speaking out against this
type of harassment.
 6. Corporate cyber stalking

Corporate cyber stalking is when a company harasses an individual online, or an

individual or group of individuals harasses an organization. Motives for corporate cyber stalking
are ideological, or include a desire for financial gain or revenge.

Indian Cyber Law

Introduction

In Simple way we can say that cyber crime is unlawful acts wherein the computer is
either a tool or a target or both. Cyber crimes can involve criminal activities that are traditional in
nature, such as theft, fraud, forgery, defamation and mischief, all of which are subject to the
Indian Penal Code. The abuse of computers has also given birth to a gamut of new age crimes
that are addressed by the Information Technology Act, 2000.

We can categorize Cyber crimes in two ways:

 The Computer as a Target: using a computer to attack other computers.

e.g. Hacking, Virus/Worm attacks, DOS attack etc.
 The computer as a weapon: using a computer to commit real world crimes.
e.g. Cyber Terrorism, IPR violations, Credit card frauds, EFT frauds, Pornography etc.

Cyber law (also referred to as cyber law) is a term used to describe the legal issues related to
use of communications technology, particularly "cyberspace", i.e. the Internet. It is less a distinct
fielding of law in the way that property or contracts are as it is an intersection of many legal
fields, including intellectual property, privacy, freedom of expression, and jurisdiction. In
essence, cyber law is an attempt to integrate the challenges presented by human activity on the
Internet with legacy system of laws applicable to the physical world.

Importance of Cyber law

 Cyber law is important because it touches almost all aspects of transactions and activities
on and concerning the Internet, the World Wide Web and Cyberspace.

 Initially it may seem that Cyber laws are a very technical field and that it does not have
any bearing to most activities in Cyberspace.

 But the actual truth is that nothing could be further than the truth.

 Whether we realize it or not, every action and every reaction in Cyberspace has some
legal and Cyber legal perspectives.

History of Indian Cyber Law

With an increase in the dependency on the use of technology, the need of cyber law was
necessary. Much like every coin has two sides, therefore, the dependency on the technology had
its own pros and cons.

Thus, the rise of the 21st century marked the evolution of cyber law in India and
Information Technology Act, 2000. It was popularly familiar as the IT Laws in India, which set
the way for the evolution of Cyber Law Act.

The first ever cyber crime was recorded in the year 1820. The objective of Information
technology laws in India is as follows:

 To protect the legal recognition to E-transactions

 Legal recognition to a digital signature as a valid signature to accept agreements online
  Protection of online privacy and stopping cyber crimes
  To give legal recognition to keeping accounting books in electronic form by bankers as
well as other organizations
 The Indian IT law updated the Reserve Bank of India Act and the Indian Evidence Act.

Though with the evolution of cyber law almost all the online activities came under
scrutiny. However, one thing about cyber law is that there are certain areas on which cybercrime
laws in India do not apply such as:

 Negotiable Instrument being other than cheque

 Power of Attorney (PoA)
 Will
 The contract for Sale or Conveyance of Immovable Property
 Central Government notified documents or transactions.

Need For Cyber Law in India

In the present world which is a more tech-savvy world the cyber law and cyber crimes
has also become more sophisticated.

Internet and technology were launched for research purpose and making the life of
humans easy but as the use and number of people on the internet increased the need of cyber
law in India was felt.

As the nature of the internet is anonymous it is easy to commit cyber crimes. Thereby
many could so misuse this aspect largely. Hence, there were the needs of cyber law in India. 

 Cyber law is important because it touches almost all aspects of transactions and activities
on and concerning the Internet, the World Wide Web and Cyberspace. Initially it may
seem that Cyber laws are a very technical field and that it does not have any bearing to
 most activities in Cyberspace. But the actual truth is that nothing could be further than the
truth. Whether we realize it or not, every action and every reaction in Cyberspace has
some legal and Cyber legal perspectives.
 Cyber law is vital because it touches almost all aspects of transactions and behavior on
and concerning the Internet, the World Wide Web and Cyberspace. Primarily it may
seem that Cyber laws are a very technical field and that it does not have any attitude to
most activities in Cyberspace. But the actual fact is that nothing could be further than the
truth. Whether we realist it or not, every work and every reaction in Cyberspace has some
legal and Cyber legal perspectives.
 India introduced the law recently and every law needs some time to mature and grow. It
was understood that over a period of occasion it will produce and further amendments
will be bring to make it well-matched with the International standards. It is significant to
realize that we need “qualitative law” and not “quantitative laws”.
 Cyber crimes can involve criminal activities that are traditional in nature, such as fraud,
forgery, theft, mischief and defamation all of which are subject to the Indian Penal Code.
The abuse of computers has also given birth to a range of new age crimes that are
addressed by the Information Technology Act, 200

IT (Information Technology) Act, 2000

Introduction

The Information Technology Act, 2000 (also known as ITA-2000, or the IT Act) is an
Act of the Indian Parliament (No 21 of 2000) notified on 17 October 2000. It is the primary law
in India dealing with cybercrime and electronic commerce. It is based on the United Nations
Model Law on Electronic Commerce 1996 (UNCITRAL Model) recommended by the General
Assembly of United Nations by a resolution dated 30 January 1997.

Since the beginning of civilization, man has always been motivated by the need to make
progress and better the existing technologies. This has led to tremendous development and
progress which has been a launching pad for further developments. Of all the significant
advances made by mankind from the beginning till date, probably the most important of them is
the development of Internet. However, the rapid evolution of Internet has also raised numerous
legal issues and questions. As the scenario continues to be still not clear, countries throughout
the world are resorting to different approaches towards controlling, regulating and facilitating
electronic communication and commerce.

The Parliament of India has passed its first Cyber law, the Information Technology Act,
2000 which provides the legal infrastructure for E-commerce in India. The said Act has received
the assent of the President of India and has become the law of the land in India. At this juncture,
it is relevant for us to understand what the IT Act, 2000 offers and its various perspectives.

The object of The Information Technology Act, 2000 as defined therein is as under:

"to provide legal recognition for transactions carried out by means of electronic data interchange
and other means of electronic communication, commonly referred to as "electronic methods of
communication and storage of information, to facilitate electronic filing of documents with the
Government agencies and further to amend the Indian Penal Code, the Indian Evidence Act,
1872, the Banker's Book Evidence Act, 1891 and the Reserve Bank of India Act, 1934 and for
matters connected therewith or incidental thereto."

Importance of the Information Technology Act

 Firstly, the implication of these provisions for the e-businesses is that email is now a
valid and legal form of communication in our country that can be duly produced and
approved in a court of law.
 Companies are now able to carry out electronic commerce using the legal infrastructure
provided by the Act.
 Digital signatures have been given legal validity and sanction in the Act.
 The Act opens the doors for the entry of corporate companies in the business of being
Certifying Authorities for issuing Digital Signature Certificates.
 The Act now allows Government to issue notification on the web thus heralding e-
governance.
  The Act enables the companies to file any form, application or any other document with
any office, authority, body or agency owned or controlled by the appropriate
 Government in electronic form by means of such electronic form as may be prescribed by
the appropriate Government.
 The IT Act also addresses the important issues of security, which are critical to the
success of electronic transactions. The Act has given a legal definition to the concept of
secure digital signatures that would be required to be passed through a system of a
security procedure, as stipulated by the Government at a later date.
 Under the IT Act, 2000, it is possible for corporate to have a statutory remedy in case if
anyone breaks into their computer systems or network and causes damages or copies
data. The remedy provided by the Act is in the form of monetary damages, not exceeding
Rs. 5 crores.

Salient Features of I.T Act

 Digital signature has been replaced with electronic signature to make it a more
technology neutral act.

 It elaborates on offenses, penalties, and breaches.

 It outlines the Justice Dispensation Systems for cyber-crimes.

 It defines in a new section that cyber café is any facility from where the access to the
internet is offered by any person in the ordinary course of business to the members of the
public.

 It provides for the constitution of the Cyber Regulations Advisory Committee.

 It is based on The Indian Penal Code, 1860, The Indian Evidence Act, 1872, The
Bankers' Books Evidence Act, 1891, The Reserve Bank of India Act, 1934, etc.
  It adds a provision to Section 81, which states that the provisions of the Act shall have
overriding effect. The provision states that nothing contained in the Act shall restrict any
person from exercising any right conferred under the Copyright Act, 1957.

Patent Law

Introduction

A patent is a form of intellectual property. A patent gives its owner the right to exclude
others from making, using, selling, and importing an invention for a limited period of time,
usually twenty years. The patent rights are granted in exchange for an enabling public disclosure
of the invention. In most countries patent rights fall under civil law and the patent holder needs
to sue someone infringing the patent in order to enforce his or her rights. In some industries
patents are an essential form of competitive advantage; in others they are irrelevant.

The procedure for granting patents, requirements placed on the patentee, and the extent of
the exclusive rights vary widely between countries according to national laws and international
agreements. Typically, however, a granted patent application must include one or more claims
that define the invention. A patent may include many claims, each of which defines a specific
property right. These claims must meet relevant patentability requirements, such as novelty,
usefulness, and non-obviousness.

Under the World Trade Organization's (WTO) TRIPS Agreement, patents should be
available in WTO member states for any invention, in all fields of technology, provided they are
new, involve an inventive step, and are capable of industrial application. Nevertheless, there are
variations on what is patentable subject matter from country to country, also among WTO
member states. TRIPS also provide that the term of protection available should be a minimum of
twenty years.

Definition

The word patent originates from the Latin patere, which means "to lay open" (i.e., to
make available for public inspection). It is a shortened version of the term letters patent, which
was an open document or instrument issued by a monarch or government granting exclusive
rights to a person, predating the modern patent system. Similar grants included land patents,
which were land grants by early state governments in the USA, and printing patents, a precursor
of modern copyright.

In modern usage, the term patent usually refers to the right granted to anyone who invents
something new, useful and non-obvious. Some other types of intellectual property rights are also
called patents in some jurisdictions: industrial design rights are called design patents in the US,
plant breeders' rights are sometimes called plant patents, and utility models and Gebrauchsmuster
are sometimes called petty patents or innovation patents.
 The additional qualification utility patent is sometimes used (primarily in the US) to
distinguish the primary meaning from these other types of patents. Particular species of patents
for inventions include biological patents, business method patents, chemical patents and software
patents.

History
The Venetian Patent Statute, issued by the Senate of Venice in 1474, and one of the
earliest statutory patent systems in the world.

Although there is some evidence that some form of patent rights was recognized in
Ancient Greece in the Greek city of Sybaris, the first statutory patent system is generally
regarded to be the Venetian Patent Statute of 1474. Patents were systematically granted in
Venice as of 1474, where they issued a decree by which new and inventive devices had to be
communicated to the Republic in order to obtain legal protection against potential infringers. The
period of protection was 10 years. As Venetians emigrated, they sought similar patent protection
in their new homes. This led to the diffusion of patent systems to other countries.

The English patent system evolved from its early medieval origins into the first modern
patent system that recognized intellectual property in order to stimulate invention; this was the
crucial legal foundation upon which the Industrial Revolution could emerge and flourish. By the
16th century, the English Crown would habitually abuse the granting of letters patent for
monopolies. After public outcry, King James I of England (VI of Scotland) was forced to revoke
all existing monopolies and declare that they were only to be used for "projects of new
invention". This was incorporated into the Statute of Monopolies (1624) in which Parliament
restricted the Crown's power explicitly so that the King could only issue letters patent to the
inventors or introducers of original inventions for a fixed number of years. The Statute became
the foundation for later developments in patent law in England and elsewhere.

Important developments in patent law emerged during the 18th century through a slow
process of judicial interpretation of the law. During the reign of Queen Anne, patent applications
were required to supply a complete specification of the principles of operation of the invention
for public access. Legal battles around the 1796 patent taken out by James Watt for his steam
engine, established the principles that patents could be issued for improvements of an already
existing machine and that ideas or principles without specific practical application could also
legally be patented. Influenced by the philosophy of John Locke, the granting of patents began to
be viewed as a form of intellectual property right, rather than simply the obtaining of economic
privilege.

The English legal system became the foundation for patent law in countries with a
common law heritage, including the United States, New Zealand and Australia. In the Thirteen
Colonies, inventors could obtain patents through petition to a given colony's legislature. In 1641,
Samuel Winslow was granted the first patent in North America by the Massachusetts General
Court for a new process for making salt.

The first Patent Act of the U.S. Congress was passed on April 10, 1790, titled "An Act to
promote the progress of useful Arts". The first patent was granted on July 31, 1790 to Samuel
Hopkins for a method of producing potash (potassium carbonate). A revised patent law was
passed in 1793, and in 1836 a major revision to the patent law was passed. The 1836 law
instituted a significantly more rigorous application process, including the establishment of an
examination system. Between 1790 and 1836 about ten thousand patents were granted. By the
American Civil War about 80,000 patents had been granted.

Effects

 A patent does not give a right to make or use or sell an invention. Rather, a patent
provides, from a legal standpoint, the right to exclude others from making, using, selling,
offering for sale, or importing the patented invention for the term of the patent, which is
usually 20 years from the filing date subject to the payment of maintenance fees.

 From an economic and practical standpoint however, a patent is better and perhaps more
precisely regarded as conferring upon its proprietor "a right to try to exclude by asserting
the patent in court", for many granted patents turn out to be invalid once their proprietors
attempt to assert them in court.
  A patent is a limited property right the government gives inventors in exchange for their
agreement to share details of their inventions with the public. Like any other property
right, it may be sold, licensed, mortgaged, assigned or transferred, given away, or simply
abandoned.

 A patent, being an exclusionary right, does not necessarily give the patent owner the right
to exploit the invention subject to the patent. For example, many inventions are
improvements of prior inventions that may still be covered by someone else's patent.

 If an inventor obtains a patent on improvements to an existing invention which is still

under patent, they can only legally use the improved invention if the patent holder of the
original invention gives permission, which they may refuse.

 Some countries have "working provisions" that require the invention be exploited in the
jurisdiction it covers. Consequences of not working an invention vary from one country
to another, ranging from revocation of the patent rights to the awarding of a compulsory
license awarded by the courts to a party wishing to exploit a patented invention.

 The patentee has the opportunity to challenge the revocation of license, but is usually
required to provide evidence that the reasonable requirements of the public have been
met by the working of invention.

Benefits

Primary incentives embodied in the patent system include incentives to invent in the first place;
to disclose the invention once made; to invest the sums necessary to experiment, produce and
market the invention; and to design around and improve upon earlier patents.

1. Patents provide incentives for economically efficient research and development (R&D).
A study conducted annually by the Institute for Prospective Technological Studies (IPTS)
shows that the 2,000 largest global companies invested more than 430 billion euro’s in
2008 in their R&D departments. If the investments can be considered as inputs of R&D,
real products and patents are the outputs.
2. Based on these groups, a project named Corporate Invention Board, had measured and
analyzed the patent portfolios to produce an original picture of their technological
profiles. Supporters of patents argue that without patent protection, R&D spending would
be significantly less or eliminated altogether, limiting the possibility of technological
advances or breakthroughs. Corporations would be much more conservative about the
R&D investments they made, as third parties would be free to exploit any developments.
This second justification is closely related to the basic ideas underlying traditional
property rights. Specifically, "the patent internalizes the externality by giving the
[inventor] a property right over its invention."
3. A 2008 study by Yi Quan of Kellogg School of Management showed that countries
instituting patent protection on pharmaceuticals did not necessarily have an increase in
domestic pharmaceutical innovation. Only countries with "higher levels of economic
development, educational attainment, and economic freedom" showed an increase. There
also appeared to be an optimal level of patent protection that increased domestic
innovation.
4. In accordance with the original definition of the term "patent", patents are intended to
facilitate and encourage disclosure of innovations into the public domain for the common
good. Thus patenting can be viewed as contributing to open hardware after an embargo
period (usually of 20 years). If inventors did not have the legal protection of patents, in
many cases, they might prefer or tend to keep their inventions secret (e.g. keep trade
secrets). Awarding patents generally makes the details of new technology publicly
available, for exploitation by anyone after the patent expires, or for further improvement
by other inventors. Furthermore, when a patent's term has expired, the public record
ensures that the patentee's invention is not lost to humanity.
5. In many industries (especially those with high fixed costs and either low marginal costs
or low reverse engineering costs — computer processors, and pharmaceuticals for
example), once an invention exists, the cost of commercialization (testing, tooling up a
factory, developing a market, etc.) is far more than the initial conception cost.

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