A patent can be defined as a document published by an authorized government body, granting the right to prohibit a person/institution to produce or use a specific new design, device or process for a certain period of time. It is a property right, based on an ‘officially sealed’ application. For the application to be recognized by competitors, all the details of the property right must be made public.
The primary purpose of a patent system is to protect inventors. Without intellectual property, any technological knowledge that is developed would be public property, making it possible for competitors to imitate without being penalized. Such a situation implies a market failure, as it leads to a suboptimal level of (private) investment in research and development.
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