Stronger patent protections lower entry costs for innovative challengers.
Stronger intellectual property protections can actually help innovators with limited resources to compete with big companies. By studying the U.S. patent system from 1890 to 2006, researchers found that stronger patent laws can lower entry costs for innovators, leading to more efficient ways of turning research into products. Weaker patent laws, on the other hand, can force companies to rely on internal resources, limiting their options for growth. Larger firms often prefer weaker patent laws, while smaller, research-focused companies benefit from stronger protections.