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Is there a fair use for patents? If so what would be the fair use?

Also should a patent be made available at a fair rate. Can a patent holder block use totally or indirectly by demanding unrealistic royalties?

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No. (Therefore no). Not necessarily. Yes.

  1. Is there a fair use for patents? No. "Fair use" is a affirmative defense for copyright infringement. The issue is that patents cover an design, idea or methodology, while copyright covers an "artistic" work. For example, if he were alive and working today, van Gogh would have copyright over his collection of paintings. If he developed a special paintbrush to make his distinctive style, he could patent the design for that brush.

  2. There is no obligation to make a patent available, much less at a "fair rate". And there is no obligation for a patent holder to make their patent available (so yes, they can block you directly or indirectly). There are various rationales for this. One is that a patent holder's historical reward for producing a new invention, a furtherance of common knowledge, is that that individual would receive an exclusive monopoly on the manufacture and sale of that invention. Often, this would serve as a way to recoup investment in new development and an incentive to experiment and expand the knowledge base of a country.

This arrangement in the modern day is most closely represented by the exclusive license agreement, in which the licensor (in this case the patent holder) agrees to not only give the licensee the legal right to use the patent holder the legal ability to use their patent, but also agrees to limitations in what other people are granted that legal ability, in exchange for compensation.

  • A patent can be cancelled if the owner does not use it. – Dale M May 15 '17 at 23:20
  • Some of the factors which might be argue in favor of fair use in copyright, are grounds for arguing that a patent is invalid entirely (e.g. the patent simply describes a scientific law). There are narrow statutory exceptions to patent rights for public health emergencies and national defense that are somewhat similar to the right to obtain a statutory license for a cover version of a song. But, these exceptions are much narrower than those for copyright. Of course, a patent only lasts 21 years, not a century or so. – ohwilleke May 16 '17 at 2:53
  • @DaleM I'm aware of trademark registrations being canceled for non-use, but suits by patent owners who don't use them (called patent trolls) are rather common. If they can be cancelled for that reason in some jurisdictions, the circumstances where that is allowed must be narrow. – ohwilleke May 16 '17 at 2:55
  • Some jurisdictions (Mexico, for example) have a requirement to "work the patent" or the government can force the patent owner into a compulsory (royalty baring) licensing requirement. – George White Mar 6 '18 at 23:26

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