nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2007‒01‒14
eleven papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Jostling for Advantage: Licensing and Entry into Patent Portfolio Races By Ralph Siebert; Georg von Graevenitz
  2. The Industry R&D Survey: Patent Database Link Project By William Kerr; Shihe Fu
  3. When Does Distributed Innovation Activity Make Sense? Location, Decentralization, and Innovation Success By Aija Leiponen; Constance E. Helfat
  4. The Merits of New Pollutants and How to Get Them When Patents Are Granted By Grischa Perino
  5. Static inefficiency of compulsory licensing: quantity vs. price competition By Cugno Franco; Ottoz Elisabetta
  6. Private-Collective Innovation and the Fragility of Knowledge Sharing By Simon Gaechter; Georg von Krogh; Stefan Haefliger
  7. Patterns of R&D and Growth Performance: Can a Technological Follower Be Converted Into an Economic Leader? By Argentino Pessoa; Mario Silva
  8. Favorable Selection in the Labor Market: A Theory of Worker Mobility in R&D Intensive Industries By Kameshwari Shankar; Suman Ghosh
  9. Artistic creation and intellectual property By Alcala, Francisco; Gonzalez-Maestre, Miguel
  10. Market Innovations and Knowledge Transfer in the Agricultural Food Market By Marit Hoven
  11. Consolidation, Delimitation and Stalemate - Disruptive Interplay and Strategic Incentives in the CBD-TRIPS Relationship By Stefan Jungcurt; Thomas Meyer

  1. By: Ralph Siebert (Department of Economics, Krannert School of Management, Purdue University, 403 West State Street, West Lafayette, IN 47907-2056, USA.; Georg von Graevenitz (INNO-tec, Munich School of Management, University of Munich, Kaulbachstraße 45, 80539 Munich, Germany.,)
    Abstract: Licensing in a patent thicket allows firms to either avoid or resolve hold-up. Firms’ R&D incentives depend on whether they license ex ante or ex post. We develop a model of a patent portfolio race, which allows for endogenous R&D efforts, to study firms’ choice between ex ante and ex post licensing. The model shows that firms’ relationships in product markets and technology space jointly determine the type of licensing contract chosen. In particular, product market competitors are more likely to avoid patent portfolio races, since the threat of hold-up increases. On the other hand, more valuable technologies are more likely to give rise to patent portfolio races. We also discuss the welfare implications of these results.
    Keywords: hold-up problem, licensing, innovation, patent race, patent thicket, research joint ventures
    JEL: L13 L49 L63
    Date: 2006–09
  2. By: William Kerr; Shihe Fu
    Abstract: This paper details the construction of a firm-year panel dataset combining the NBER Patent Dataset with the Industry R&D Survey conducted by the Census Bureau and National Science Foundation. The developed platform offers an unprecedented view of the R&D-to-patenting innovation process and a close analysis of the strengths and limitations of the Industry R&D Survey. The files are linked through a name-matching algorithm customized for uniting the firm names to which patents are assigned with the firm names in Census Bureau’s SSEL business registry. Through the Census Bureau’s file structure, this R&D platform can be linked to the operating performances of each firm’s establishments, further facilitating innovation-to-productivity studies.
    Keywords: innovation, research and development, patents, scientists, technology
    JEL: C81 O30 O31
    Date: 2006–11
  3. By: Aija Leiponen; Constance E. Helfat
    Abstract: Companies face an expanding set of choices about where to locate their innovation activity, both within their home countries and abroad. This location choice also requires firms to make a simultaneous choice about the organizational structure of innovation activity : almost by definition, multiple locations per firm imply some degree of decentralization. Using firm-level data on innovation output and the location of research and development (R&D) activity, we shed new light on the question of whether firms that have multiple locations also have greater innovation success. Our results indicate that, on average, having distributed R&D activity is beneficial in terms of the extent and breadth of innovation success, and the effect is strongly related to the knowledge sourcing strategies that firms employ. These results are consistent with the interpreta-tion that R&D location decisions are driven by the desire of firms to access a broad set of external sources of knowledge for innovation activities. We also find that the benefits of multiple R&D lo-cations do not apply to novel (new-to-the-market) innovations. Our results suggest that when analyzing technological innovation, it is important to distinguish between novel and imitative innova-tions, since their determinants may differ.
    JEL: O32 L22
    Date: 2006–12–21
  4. By: Grischa Perino (University of Heidelberg, Department of Economics)
    Abstract: The performance of market based environmental regulation is affected by patents and vice versa. This interaction is studied for a new type of innovation where new technologies reduce emissions of a specific pollutant but at the same time cause a new type of damage. A robust finding is that the efficiency of permits is affected by monopoly pricing of the patent-holding firm. This result carries over to other types of innovation. Taxes are inefficient if technologies produce perfect substitutes and share all scarce inputs. Moreover, the optimal tax on pollution might be negative.
    Keywords: Innovation; Environment; Instrument Choice; Patents; Monopoly Pricing
    JEL: Q55 L5 H23 O3
    Date: 2006–07
  5. By: Cugno Franco (University of Turin); Ottoz Elisabetta (University of Turin)
    Abstract: A common argument against compulsory licensing of intellectual property maintains that it facilitates the entry of inefficient producers, which may reduce social welfare independently of any effects on R&D incentives. We study the issue in a model where the innovative firm, under the threat of compulsory licensing, react strategically by choosing between quantity and price competition. We show that the risk of a reduction in static welfare due to the entry of highly inefficient firms is avoided if licensing entails a royalty per unit of output and zero fixed fee. The rationale behind this result lies in the fact that compulsory licensing threat works as a disciplining device to improve static social welfare, even when the applicant is a high cost inefficient firm.
    Date: 2006–06
  6. By: Simon Gaechter (University of Nottingham); Georg von Krogh (ETH Zurich); Stefan Haefliger (ETH Zurich)
    Abstract: Incentives to innovate is a central element of innovation theory. In the private-investment model, innovators privately fund innovation and then use intellectual property protection mechanisms to appropriate returns from these investments. In the collective-action model, public subsidy funds public goods innovations, characterized by non-rivalry and non-exclusivity. Recently, these models have been compounded in the privatecollective innovation model where innovators privately fund public goods innovations (von Hippel and von Krogh, 2003). Private-collective innovation can be illustrated in the case of open source software development. The current paper contributes to the work on private-collective innovation by investigating incentives that motivate innovators to share their knowledge in an initial situation devoid of community activity. We use game theory to predict knowledge sharing behavior, and test these predictions in a laboratory setting. The results show that knowledge sharing is a coordination game with multiple equilibria, reflecting the fragility of knowledge sharing between innovators with conflicting interests. The experimental results demonstrate important asymmetries in the fragility of knowledge sharing and, in some situations, much more knowledge sharing than theoretically predicted. A behavioral analysis suggests that knowledge sharing is not only affected by the material incentives, but also by social preferences. The results offer general insights into the relationship between incentives and knowledge sharing and contribute to a better understanding of the inception of privatecollective innovation.
    Keywords: innovation, private-collective innovation model, knowledge sharing, incentive, open source software, experimental economics, game theory
    Date: 2006–10
  7. By: Argentino Pessoa; Mario Silva
    Abstract: It is well known that researchers in several traditions have argued that innovation is essential to ensure countries’ economic growth (Schumpeter, 1912; Freeman, 1987; Pavitt, 1982; Romer, 1990; Jones, 1995). At the same time, others researchers have stressed the role of imitative capacity in economic catching-up (Rosenberg, 1963; Abramovitz, 1986; Fagerberg, 1987). Simultaneously, for a great lot of countries economic growth has become one of the most significant policy commitments. Accordingly, although with very different results, several countries have vastly increased their economic and policy commitments to innovation and have made investments in their innovative capacity, and in their levels of R&D expenditures. Furthermore, R&D intensity, the structure of R&D expenditures and the productivity of R&D outlays show a remarkable diversity across countries. Our paper uses this diversity and the lessons of the past three decades to shed some light on the relationship between productivity and technological change and aims to answer the following questions: How was the productivity in economic miracles propelled by a technological change? What are the reasons why it seems so easy for some few countries — and so difficult for a lot of others — to catch-up with the levels of productivity of the world technological frontier? So, in this paper we investigate the patterns of development in national innovative capacity, focusing on the country level investments in R&D, and in the examination of the patent counts, in a broad sample of countries that include the leaders and the followers in catching up to the world's leading countries. The institutional configurations, and national policy decisions that shape the different behaviour of some follower nations in terms of productivity and innovative output, are also studied.
    Date: 2006–08
  8. By: Kameshwari Shankar (Charles River Associates, Boston, MA); Suman Ghosh (Department of Economics, College of Business, Florida Atlantic University)
    Abstract: This paper builds a theoretical model to address evidence on labor mobility patterns in technology-intensive firms engaged in R&D. Labor turnover in these firms is characteristically different from turnover in traditional industries both in size and composition. Specifically, the pool of workers switching employers comprises of relatively productive workers. Our model focuses on distinguishing features of R&D-intensive firms, in particular, the stochastic nature of returns to R&D investment and the transmission of knowledge spillovers through worker movement, to explain patterns of labor mobility in these firms. The analysis also serves as a tool to analyze the role of Non Disclosure Agreements in wage contracts.
    Date: 2005–12
  9. By: Alcala, Francisco; Gonzalez-Maestre, Miguel
    Abstract: We analyze artistic markets considering three key distinctive features that have been overlooked by the standard analysis on intellectual property. These features are the dynamic link between the current number of young artists and future high-quality artistic creation, Rosen's superstars phenomenon, and the role played by promotion costs. Introducing them into an overlapping-generations model brings about a new perspective on the consequences for artistic creation of changes in the copyright term, progress in communication technologies favoring market concentration by stars, and the enlargement of markets. The conventional result that longer copyrights always stimulate artistic creation only holds as a particular case.
    Keywords: superstars; copyright; innate abilities; talent.
    JEL: O34 L82 J44
    Date: 2005–10
  10. By: Marit Hoven
    Abstract: Food markets change with increasing wealth and the globalization of the economy. WTO and EU are challenging countries to enhance lower level of national protection and regulation of markets, including the markets for agricultural foods. Thus, the producers of food are continuously exposed for competition. As an answer to this food producers in Norway have looked for different possibilities to keep up the level of production and profitability. To some degree producers have adapted to new markets by either introducing new products for a new set of customers, or by making changes in existing products to satisfy the customers preferences. Export of high quality sheep meat from Norway to Japan can be mentioned as an example of market innovations, one of the five types of innovations described by Schumpeter (1934). In later years we have seen a tendency for groups of customers paying more for food products of certain origin, taste, design or other qualities. Although the cooperatives still are dominant in food processing and marketing in Norway, there are now an increasing number of farmers working with market innovations outside the traditional channels. Possibilities for success might depend on factors as culture, price, design and more. Specialised knowledge in different professions seems to be relevant when handling production, processing and marketing. Questions raised in this paper are: Is there a connection between market innovation success and the farmer’s ability to develop and transfer knowledge? How can we measure, understand and describe such processes?
    Date: 2006–08
  11. By: Stefan Jungcurt (Humboldt University of Berlin, Institute of Agricultural Economics and Social Sciences Division of Resource Economics, Luisenstr. 56, 10099, Berlin); Thomas Meyer (Deutsche Bank Research, eResearch, D-60272 Frankfurt am Main)
    Abstract: The relationship between the Convention on Biological Diversity (CBD) and the WTO Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) is characterized by a persistent potential for disruptions in implementation, such as ‘biopiracy’ conflicts, because of the agreements’ incompatible provisions on property rights over genetic resources. The lack of consolidation is often explained by attempts to strategicallly exploit interplay between the two institutions. Countries of the North and the South are said to push for provisions under their preferred agreement in order to circumvent obligations under the other. We develop an alternative explanation based on a conception of international negotiators acting as agents of particular interest groups rather than as representatives of the state as a whole. Using a Two-level Games model of independent negotiations for agreements on functionally interdependent issues, we analyze the incentives for negotiators to delay or prevent consolidation for strategic reasons. Our analysis shows that, under certain conditions, persistent disruption may be due to a strategic dilemma that prevents negotiators from taking initiatives for consolidation.
    Keywords: international cooperation, institutional interplay, disruption, biopiracy, CBD, TRIPS, genetic resources, intellectual property rights
    JEL: F51 F53 F59 Q56 Q57
    Date: 2006–11

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