No, patents really are intended to foster innovation.
Intention does not make reality.
Imagine you're a
company/individual that's developed some wicked new technology. Maybe you've
spent 5-10 years tuning this process/product to the point where it works and
you're ready to sell it to the public. You have two choices: keep the actual
process and details secret so no one can copy it, or disclose the details in
exchange for a finite monopoly privilege.
The monopoly privilege directly harms innovation by third parties. The least destructive option is therefore trade secrets. I have no problem with that, because it allows others to come up with inventions independently.
Let's try an example: you've developed some chemistry that allows extremely
high detail, realistic color photographs. Now, if you sell the film and
chemicals, any bozo can analyze and replicate the chemistry, and your
development work is up in smoke.
As it should be, for if I come up with something that other chemists can duplicate, there's no reason to give me a monopoly. I would only be setting back the scientific advances by a generation.
So, if you want to keep it secret, you have
to keep the developer secret and in-house. Force customers to buy sealed
cameras and ship them back to the factory for developing and printing. This
might still be better than contemporary technology, but you have to admit
it's inconvenient.
Nobody said life shouldn't be inconvenient, except those arguing for patents. And they conveniently forget how inconvenient they make life for everybody else, since that is the price for making life convenient for just one.
Suppose you invent an airplane, and patent it. You'll prevent innovation ands stifle your local industry , while in other parts of the world people who are just as smart as you will make huge progress.
That said, you still aren't forced to make sealed cameras, you can sell unsealed cameras that people can tinker with. If your cameras are good, you will still make a nice living from them. And if you get competitors, then the market will grow, and you'll sell more units.
The other alternative is to take patent protection on the formula, maybe even
sell/license the developing process to smaller chemists, and sell
replaceable-film cameras that people can have developed locally. Much better
for the customer.
This is not better. You're monopolizing the process, thereby preventing others from improving "your" idea, expect rent from everyone and cause the idea to be shunned by the vast majority of potential inventors until your patent expires.
This is not better for the customer, who could be having a full ecosystem of alternatives and modifications.
A side benefit (to society) of this is that by disclosing
the details of the manufacturing process, some other guy can look at those
details, find places to improve, and sell consumers even better cameras. The
new guy will owe you some royalty for your contribution to his camera, but he
ought still be able to make a profit - he has a better product - any you get
compensated for your lost sales.
That is pure fantasy. Have you even read a single patent? They are totally unsuitable for learning a process. Nobody reads patents to learn a competitor's secrets, they just look at the other guy's products, and think through the problem or reverse engineer. Granted, this requires other people with the same basic knowledge and intelligence as the inventor. There are plenty of those in the world.
Finally, I don't believe the claim that everybody is better off if the new guy has to pay royalties. In the absence of patents, the new guy can just reinvent his own version of the product, and price it competitively (you don't believe that the first inventor is some unique snowflake with superhuman intelligence, do you?). This increases the new guy's profit since he won't have to pay royalties. It lowers prices and benefits customers, as the products don't have to include royalties. Finally, the original guy gets competition, and has to improve his own product to retain market share. That is after all how a free market is supposed to work.
Or maybe you're a small-time inventor without the resources to build a
prototype. If you tell some unethical company about your invention, they'll
be able to copy it easily. Maybe be liable for breaching an NDA, if you were
clever enough to write a really good one. If you have patent protection, then
you can at least farm your idea around to manufacturers with less fear of
being undercut.
First of all, if you call yourself an inventor and you cannot build a prototype, then you're no inventor. The world is full of patented bullshit ideas nobody has ever built. Ideas are a dime a dozen. Go to your local university, and ask a physics or engineering student about their top ten undeveloped ideas. You'll be able to write a book in no time.
It is true that a small-time inventor is at a negotiating disadvantage, but as you say that is an issue of contract law. Preventing the whole world from (re)inventing an idea just so one of the inventors who came up with the idea has a negotiating advantage is a terrible social bargain. People must be allowed to work their ideas independently.
Sadly, patents seem to have diverged from protecting actual ideas and
products and moved on to trivialities like one-click, like computer analogies
of every conceivable physical process, and "business methods." If the patent
office could be more clear about what is actually patentable, and more
stringent in their application of "obvious," then patents could return to
benefiting developers more than lawyers.
Well, I agree with you there. However, I also believe that the original justification of patents is no longer valid. It made sense historically only because the pool of qualified inventors (ie sufficiently educated and with the means to tinker) was small. Today, there are millions of inventors the world over, and what one person can come up with, another can too. So there is no benefit to society in protecting one individual inventor at the expense of many others.