nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2007‒01‒28
eight papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Persistence of innovation, technological change and quality-adjusted patents in the US Pharmaceutical industry By Gautier Duflos
  2. Management of Knowledge Workers By Hvide, Hans Krogh; Kristiansen, Eirik Gaard
  3. Pricing Patents for Licensing in Standard Setting Organisations: Making Sense of FRAND Commitments By Layne-Farrar, Anna; Padilla, Atilano Jorge; Schmalensee, Richard
  4. Uncertainty and the Dynamics of R&D By Nick Bloom
  5. Research networks and scientific production in Economics, The recent Spanish Experience. By Raul Ramos; Vicente Royuela; Juan Carlos Duque
  6. The Evolution of the French Public Poliy to Promote Biotech Innovation : The Case of Genomics By Anne Branciard; Vincent Mangematin
  7. Entry Liberalization, Export Subsidy and R&D By Roy Chowdhury, Prabal
  8. Union structure and firms incentives for cooperative R&D investments By Constantine Manasakis; Emmanuel Petrakis

  1. By: Gautier Duflos (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I], CREST-LEI - [Ecole Nationale des Ponts et Chaussées])
    Abstract: This paper analyzes American pharmaceutical firms' persistence in innovating prior to the wave of mergers and acquisitions that accompanied the "Biotech revolution". We evaluate the impact of past innovative activity on firms' innovation propensities using a non-linear GMM estimator for exponential models that allows for predetermined regressors and linear feedback. We find that innovative activity at the firm level depends strongly on the technological importance of past innovations. In particular, breakthroughs depend largely on past innovations' scope, and this effect is likely to deter further pioneering behaviors rather than strengthen incentives to invest on non cumulative R&D. The results also shed light on the importance of small firms for the technological change in pharmaceuticals, and suggest that large firms may persist in using patents strategically to retain sales.
    Keywords: Patent citations, pharmaceutical industry, persistence in innovation.
    Date: 2007–01–15
  2. By: Hvide, Hans Krogh; Kristiansen, Eirik Gaard
    Abstract: We study how complementarities and intellectual property rights affect the management of knowledge workers. The main results relay when a firm will wish to sue workers that leave with innovative ideas, and the effects of complementary assets on wages and on worker initiative. We argue that firms strongly protected by property rights may not sue leaving workers in order to motivate effort, while firms weakly protected by complementary assets must sue in order to obtain positive profits. Firms with more complementary assets pay higher wages (and have lower turnover), but such higher pay has a detrimental effect on worker initiative. Our analysis suggests that strengthened property rights protection reduces turnover costs but weakens worker initiative.
    Keywords: Entrepreneurship; Innovation; IPR; Litigation; Personnel economics; R&D; Start-ups
    JEL: E00
    Date: 2007–01
  3. By: Layne-Farrar, Anna; Padilla, Atilano Jorge; Schmalensee, Richard
    Abstract: We explore potential methods for assessing whether licensing terms for intellectual property declared essential within a standard setting organization can be considered fair, reasonable, and non-discriminatory (FRAND). We first consider extending Georgia-Pacific to a standard setting context. We then evaluate numeric proportionality, which is modelled after certain patent pool arrangements and which has been proposed in a pending FRAND antitrust suit. We then turn to two economic models with potential. The first—the efficient component-pricing rule (ECPR)—is based on the economic concept of market competition. The second—the Shapley value method—is based on cooperative game theory models and social concepts for a fair division of rents. Interestingly, these two distinct methods suggest a similar benchmark for evaluating FRAND licenses, but ones which might appeal differently to the courts and competition authorities in the US as compared to Europe. We find that under any approach, patents covering “essential” technologies with a greater contribution to the value of the standard and without close substitutes before the standard gets adopted should receive higher royalty payments after the adoption of the standard.
    Keywords: Efficiency; Fairness; Licensing; Patents; Standard Setting Organizations
    JEL: L24 L40
    Date: 2007–01
  4. By: Nick Bloom
    Abstract: Uncertainty varies strongly over time, rising by 50% to 100% in recessions and by up to 200% after major economic and political shocks. This paper shows that higher uncertainty reduces the responsiveness of R&D to changes in business conditions - a "caution-effect" - making it more persistent over time. Thus, uncertainty will play a critical role in shaping the dynamics of R&D through the business cycle, and its response to technology policy. I also show that if firms are increasing their level of R&D then the effect of uncertainty will be negative, while if firms are reducing R&D then the effect of uncertainty will be positive.
    JEL: D8 D92 E32 O3
    Date: 2007–01
  5. By: Raul Ramos (Faculty of Economics, University of Barcelona.); Vicente Royuela (Faculty of Economics, University of Barcelona.); Juan Carlos Duque (Regional Analysis Laboratory (REGAL). San Diego State University.)
    Abstract: This paper studies Spanish scientific production in Economics from 1994 to 2004. It focuses on aspects that have received little attention in other bibliometric studies, such as the impact of research and the role of scientific collaborations in the publications produced by Spanish universities. Our results show that national research networks have played a fundamental role in the increase in Spanish scientific production in this discipline.
    Keywords: Bibliometric techniques, scientific production in Economics, research networks.
    Date: 2007–01
  6. By: Anne Branciard (LEST - Laboratoire d'économie et de sociologie du travail - [CNRS : UMR6123] - [Université de Provence - Aix-Marseille I][Université de la Méditerranée - Aix-Marseille II]); Vincent Mangematin
    Abstract: European Biotechnology companies and public policy-makers face to a number of crucial problems related to the development of Biotechnology in Europe : European industrial competitiveness, the relative under-exploitation of the European science base in Biotechnology, poor technology transfer mechanisms and difficulties in starting 'spin-off' firms. <br />The aim of this paper on innovation in genomics and biomedical related biotechnologies is to study the relative impact of the different public policy in France compared to the action of the private non for profit sector. Public policies in favour of biotech have changed during the last ten years from a support of research in large firms to a support of SME's creation in biotech. At the same time, large non-for profit organisations such as CEPH (Human Polymorphism Research Center) and AFM (French Organisation Against Myopaty) create a new dynamic by initiating path breaking scientific and technical programmes. This new scientific space has been complementary to the public policy, but only to a certain extend. <br />By studying the co-ordination mechanisms between the different organisations (non for profit organisations, public authorities, public sector research, Biotech SMEs and large firms, especially in the biomedical sector), this paper shows that the existing contradiction between the different tools to encourage biotech economic development can explain the poor development of biotech sector in France in the last few years. It also shows that the situation is getting better the last two years, especially in terms of firms' creation.
    Keywords: Public Policy; Research Policy; Biotechnology; Innovation; R&D; SME
    Date: 2007–01–19
  7. By: Roy Chowdhury, Prabal
    Abstract: We examine, in the context of less developed countries, the R&D behaviour of igopolistic firms who compete over R&D, as well as output levels. We also assume that the firms can sell in either of the two markets - the domestic, or the foreign. We show that entry liberalization, despite increasing the level of competitiveness, does not affect the level of R&D. An increase in export subsidy may, however, lead to an increase in domestic R&D. Both these results contradict the popular argument that the levels of domestic R&D is positively related to the level of domestic competitiveness. We also demonstrate that any foreign firm that may enter selects a level of R&D that is atleast as efficient as that selected by any domestic firm. Finally, we demonstrate that entry liberalization has a positive effect on exports, as well as aggregate output.
    Keywords: Entry liberalization; export subsidy; R&D; competitiveness.
    JEL: F13 O32
    Date: 2006–02
  8. By: Constantine Manasakis (Department of Economics, University of Crete, Greece); Emmanuel Petrakis (Department of Economics, University of Crete, Greece)
    Abstract: This paper investigates the impact of alternative unionization structures on firms' incentives to spend on cost-reducing R&D activities as well as to form a Research Joint Venture, in the presence of R&D spillovers. We show that, in contrast to the "hold up" argument, if firms invest non-cooperatively and spillovers are low, R&D investments are higher when an industry-wide union sets a uniform wage rate than under firm-level unions. In contrast, investments are always higher under firm-level unions in the case of RJVs. Firms' incentives to form an RJV are non-monotonic in the degree of centralization of the wage-setting, with the incentives being stronger under an industry-wide union if and only if spillovers are low enough. Finally, centralized wage-setting as well as high unemployment benefits may hinder the formation of costly RJVs and their potential welfare benefits.
    Keywords: Unions, Oligopoly, Cost-reducing Innovations, Research Joint Ventures, Spillovers
    JEL: J51 L13 O31
    Date: 2007–01–23

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