Patently Derivative

A patent is a contract between a party and the government.

The primary purpose of the contract is for the government to grant to the other party an option to prosecute a third party for infringement of a claimed crown or state monopoly as defined in the contract.

In other words, our governments are selling derivatives on crown or state monopolies.

And in my opinion the cost of acquisition of these derivatives is generally well overpriced given the uncertainties around the scope and legitimacy of the implied crown or state monopolies within these option contracts.

If I get a chance I might apply a bit of formal derivative pricing to the subject.