Patents are another means by which competition and entry into an industry, profession, or trade is restricted
By government action. A patent is the right granted by the federal government to an inventor for the exclusive use of the invention for a period of 17 years. The patent holder (individual of firm) can use the patent directly or grant a license for others to use the invention in exchange for royalty payments. The granting of a limited monopoly to the inventor is aimed at encouraging inventions, but it also leads to output restrictions and higher prices. To be sure, the monopoly power resulting from a patent is limited, not only by time, but also because other firms try to develop similar product and processes. Sometimes this is not possible, however, because large firms other hold so many patents on a particular product or process as to completely dominate a field and exclude other long after the original patents have expired. This has been the case in such industries as aluminum, shoe manufacturing equipment, and many others. Even if restricted by antitrust action, this monopoly power is sometimes further reinforced by cross licensing agreements, whereby a firm allows other firms in related fields to use some of its patents in exchange for being allowed to use theirs. The result is a cartel-like agreement indirectly made possible the government, under which a few firms dominate technology in the field.