Part III presents the refinement theory within an economic model of invention
and patent prosecution. The model contains a single potential inventor/patentee
and a single potential competitor.
The inventor moves first and decides whether to try to invent E, a set of embodiments of a patentable invention.
If an invention occurs, the inventor can draft a patent that claims E or she can make a further investment to refine her understanding of the invention and draft a broader patent that claims E plus an additional set of embodiments F. The set F can only be obtained after E. If the inventor obtains E but not F, then the competitor has a chance to develop an embodiment in F and use the embodi-ment in competition with the inventor.