Two distinct theories of patents - the reward theory and the contract theory - are customarily adopted by the courts to justify the patent system. The reward theory maintains that the function of the patent system is to remunerate successful innovators so as to encourage R&D effort. In contrast,...

In this paper we look at patents as alternative to trade secrets. We disentangle the disclosure motive for patent protection from the traditional reward motive by adjusting the level of patent protection so as to make the innovator just indifferent between patenting and keeping the innovation...