ABSTRACT
Patent claims determine the boundaries of the exclusive rights with respect to other patents as well as to alternative products or technologies. The present chapter explores how many contemporary, unpatented, alternative products or technologies should fall within the scope of protection and, therefore, be declared as infringing the patent. A narrow protection allows a larger number of alternative products or technologies to be used legally. This tends to increase instantaneous consumers’ surplus since the alternative products and technologies make competition more intense so that the inventors’ ability to charge premium prices are limited – consumers can switch to non-infringing substitutes. With a narrow patent, there will always be the danger that cumulated flow profits will be insufficient to cover research expenses owing to the more intense competition. In this situation, firms may either choose not to patent the invention or even not to engage in research at all.1
