nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2007‒03‒17
seven papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Fences and competition in patent races By Schneider, Cédric
  2. Are More Important Patents Approved More Slowly and Should They Be? By Régibeau, Pierre; Rockett, Katharine
  3. Inter-firm technology transfer: Partnership-embedded licensing or standard licensing agreements? By Hagedoorn, John; Lorenz-Orlean, Stefanie; Kranenburg, Hans
  4. Microeconomics of Knowledge: African Case By Manuel, Eduardo
  5. Equilibrium and Optimal R&D Roles in a Mixed Market By Vasileios Zikos
  6. Strategic Responses to Parallel Trade By Margaret K. Kyle
  7. Multi-Product Firms, R&D, and Growth By Minniti, Antonio

  1. By: Schneider, Cédric
    Abstract: This paper studies the behaviour of firms facing the decision to create a patent fence, defined as a portfolio of substitute patents. We set up a patent race model, where firms can decide either to patent their inventions, or to rely on secrecy. It is shown that firms build patent fences, when the duopoly profits net of R&D costs are positive. We also demonstrate that in this context, a firm will rely on secrecy when the speed of discovery of the subsequent invention is high compared to the competitors. Furthermore, we compare the model under the First-to-Invent and First-to-File legal rules. Finally, we analyze the welfare implications of patent fence
    JEL: L10 O34
    Date: 2005–12–02
  2. By: Régibeau, Pierre; Rockett, Katharine
    Abstract: Innovative activities often are heavily regulated. Reviews conducted by administrative agencies take time and are not perfectly accurate. Of particular concern is whether, by design or not, such agencies discriminate against more important innovations by taking more time to perform their reviews. We study the relationship between the length of patent review and the importance of inventions in a theoretical model. We build a simple model of the US patent review process. The model predicts that, controlling for a patent's position in the new technology cycle, more important innovations would (and should) be approved more quickly. Also, the approval delay is likely to decrease as an industry moves from the early stages of an innovation cycle to later stages. These predictions are in line with the evidence we obtain from a data set of US patents granted in the field of genetically modified crops from 1983 to 1999. Our analysis also helps to reconcile the results on the relationship between importance and delay found in previous studies.
    Keywords: genetic modification; innovation; patent policy; regulation
    JEL: L43 O31 O32 O33 O34 O38
    Date: 2007–03
  3. By: Hagedoorn, John (UNU-MERIT and University of Maastricht); Lorenz-Orlean, Stefanie (University of Maastricht); Kranenburg, Hans (Radboud University Nijmegen)
    Abstract: When companies decide to engage in technology transfer through licensing to other firms, they have two basic options: to use standard licensing contracts or to set-up more elaborate partnership-embedded licensing agreements. We find that broader partnership-embedded licensing agreements are preferred with higher levels of technological sophistication of industries, with greater perceived effectiveness of secrecy as a means of appropriability, and when licensors are smaller than their licensees. Innovative differentials between companies, innovative supremacy of the licensor, and market and technological overlap between partners appear to have no effect on the preference for a particular form of licensing.
    Keywords: technology transfer, licensing, inter-firm partnership, innovation
    JEL: O31 O34 D74
    Date: 2007
  4. By: Manuel, Eduardo
    Abstract: Since the process of globalization era, we can always lived in economics of knowledge. The cicle of economics founded on knowledge are compost by three components: the investment in knowledge; the production and the diffusion of information technology and communication (ITC) and the institutional mechanisms that favor the access to knowledge (Foray, 2004). By fact the economics are divided in Micro and Macroeconomics, this work has as objective to approach theme “Microeconomics of Knowledge” based on African case. We concluded that, in general analysis, South Africa and Tunisia are the countries of the selected with better performance in microeconomics of knowledge, and Angola, Chad and Ethiopia are poor countries in this area of knowledge. High rates of adult alphabetization can stimulate companies and firms to employ skilled personal according to their necessities and this personal can and it is ready to work with advanced technology and to effect R&D for development of their activities.
    Keywords: Economic of Knowledge; Macroeconomics; Microeconomics; Microeconomics of Knowledge
    JEL: M19 D89 O12 L29 O32 D29
    Date: 2006–05–15
  5. By: Vasileios Zikos (Dept of Economics, Loughborough University)
    Abstract: This is the first paper to investigate the timing of the R&D decisions in a mixed market. Considering a model in which a public firm competes against a private one, we examine the desirable (welfare-maximizing) and the equilibrium R&D role of the public firm. Our results suggest that from a social point of view, the public firm should carry out its investment as a Stackelberg follower. Using the observable delay game of Hamilton and Slutsky [Games and Economic Behavior 2 (1990) 29], we show that the public firm may play this desirable role.
    Keywords: Endogenous timing; R&D; Stackelberg; mixed market.
    JEL: L13 L31 L32
    Date: 2007–02
  6. By: Margaret K. Kyle
    Abstract: This paper examines how pharmaceutical firms have responded to changes in intellectual property rights and trade barriers that legalized "parallel imports" within the European Union. The threat of arbitrage by parallel traders reduces the ability of firms to price discriminate across countries. Due to regulations on price and antitrust law on rationing supply, pharmaceutical firms may rely on non-price responses. Such responses include differentiation of products across countries and selective "culling" of product lines to reduce arbitrage opportunities, as well as raising arbitrageurs' costs through choice of packaging. Using a dataset of drug prices and sales from 1993-2004 covering 30 countries, I find evidence that the behavior of pharmaceutical firms in the EU with respect to their product portfolios is consistent with attempts to reduce parallel trade. This may at least partially explain why parallel trade has not yet resulted in significant price convergence across EU countries. Accounting for non-price strategic responses may therefore be important in assessing the welfare effects of parallel imports.
    JEL: D21 L1
    Date: 2007–03
  7. By: Minniti, Antonio
    Abstract: Multi-product firms dominate production activity in the global economy. There is widespread evidence showing that large corporations improve their efficiency by increasing the scale of their operations; this objective can be realized either by consistently investing in R&D or by expanding the product range. In this paper, we explore the implications of this fact by embedding multi-product firms in a General Equilibrium model of endogenous growth. We analyze an economy with oligopolistic firms that carry out in-house R&D programs in order to achieve cost-reducing innovations. Market structure is endogenous in the model and is jointly determined by the number of firms and the number of product varieties per firm. Both economies of scope and scale characterize the economic environment. We show that the market equilibrium involves too many firms (too much inter-firm diversity) and too few products per firm (too little intra-firm diversity); moreover, we find out that the total number of products and productivity growth are inefficiently low under laissez-faire. The nature of these distortions is discussed in detail.
    Keywords: imperfect competition; multi-product firms; endogenous growth; R&D
    JEL: E0 O31 O3
    Date: 2006

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