They are a governmentbacked monopoly that can extend for 20 years. This regulation is sometimes thought necessary to help spur innovation. Patents, the argument goes, help create incentives to innovate. The answer is not obvious. As economists have long argued, while it is sometimes true that a patent will spur innovation, it is not always the case.
Patents are both an input and an output in the production process.
Increasing patents thus may increase incentives, but it will also increase costs. Whether on balance the incentives outweigh the costs is a hard question. In many contexts, they clearly will. But for at least some kinds of innovations economists agree that they will not. In those cases, expanding intellectual property rights will harm the incentive to produce.