Conclusion The patent system has emerged as the central institution for asserting intellectual property rights in many crucial fields of science and technology. From an economic point of view, patents offer a second-best solution to the market failure arising from the publicgood nature of knowledge. As such, the patent system contributes to solving a problem but comes with shortcomings of its own, mostly because it creates market power positions that can adversely affect the economic performance of the system. In fact, for most of the nineteenth century, the patent system was under considerable criticism by the same economics profession that now provides the most valuable insights for its defense. This change is due to the increased appreciation for the critical role that innovations play in stimulating economic growth. The possibility of protecting discoveries through patents,for example, is credited for bringing about crucial technical improvements in the industrial revolution (Dutton 1984).
As noted, the ex post inefficiency of the patent system is viewed as the necessary downside in providing enough inducement to undertake desirable R&D projects. The size of the inducement depends on the length and scope of the patent right. Ideally, such an inducement should be proportional to the cost of the R&D project, which means that the length, breadth, and height of a patent should be tailored to each particular innovation. In addition to the cost of the project, such a tailored patent should also reflect the particular market conditions of the new product and/or process. Clearly, the patent system does not do that, and arguably it cannot do that. These limitations suggest that continued efforts are required to improve the workings of the patent system. A solid understanding of its complex (and sometime subtle) economic implications, which we have tried to review here, should prove useful in this endeavor.
Imagine if Ford, Cheverolet, Cat, etc. etc. all had to develop their own unique way of operating their vehicles (because the way we operate them now is covered by patents), that would seriously hurt our choice in vehicles and not to mention driving up the costs significantly across the entire automotive industry.
Automobile companies do have contend with patents (and not only that - have always had to contend with patents - Ford was not born before Patent Law took effect in the USA). And there is no shortage of different automobiles in the marketplace, and no shortage of innovations in that market either.
If SamSung is forced to do things differently ... usuability will go down.