nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2007‒03‒24
nine papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Die Beziehung zwischen dem Wettbewerbsrecht und dem Recht geistigen Eigentums - Konflikt, Harmonie oder Arbeitsteilung? - The Relationship between Antitrust Law and Intellectual Property Law - Conflict, Accommodation or Division of Labour? By Dieter Schmidtchen
  2. R&D Delegation in a Duopoly with Spillovers By Bruno Versaevel; Désiré Vencatachellum
  3. Patent Pools and the Dynamic Incentives to R&D By Bruno Versaevel; Vianney Dequiedt
  4. Overseas R&D Activities and Home Productivity Growth: Evidence from Japanese Firm-Level Data By TODO Yasuyuki; SHIMIZUTANI Satoshi
  5. Horizontal R&D Cooperation and Spillovers: Evidence from France By Bruno Versaevel; Désiré Vencatachellum
  6. What Determines Overseas R&D Activities? The Case of Japanese Multinational Firms By SHIMIZUTANI Satoshi; TODO Yasuyuki
  7. Network Effects in R&D Partnership Evidence from the European Collaborations in Micro and Nanotechnologies By Corinne Autant-Bernard; Pascal Billand; Christophe Bravard; Nadine Massard
  8. Business School-Industry Cooperation: Lessons from Case Studies By Jean-Jacques Chanarron; David Birchall
  9. Persistence of profits and the systematic search for knowledge - R&D links to firm above-norm profits By Eklund, Johan; Wiberg, Daniel

  1. By: Dieter Schmidtchen (Universität des Saarlandes)
    Abstract: The relationship between the Antitrust Law and the Patent, Copyright and other Intellectual Property (IP) Laws has perplexed antitrust scholars and practitioners for a long time. Intellectual property and antitrust regimes both seek to advance the economic well-being of society. However, whereas the IP laws are designed to create exclusive rights - rights that sometimes rise to the level of monopolies - in order to encourage innovation and creativity, Antitrust Law is designed to foster competition and to prevent the formation of monopolies. Finding the right balance between maintaining competition and creating incentives to innovate is no easy task. This paper emphasises a division of labour: IP law should concern itself with assigning and enforcing intellectual property rights, while Antitrust Law should concern itself with the use of those rights for anti-competitive purposes. I develop the main thesis in three parts: The first part of the paper outlines the economics of IP rights. The second part presents basics of Antitrust Law. The third part deals with some specificity of the IP/Antitrust Law interface: Reasons giving rise for special concerns are found in the areas of mergers, licensing and cross-licensing, patent pools, grant-backs, practices to extend the legal patent monopoly beyond the life of the patent, interfaces and interoperability in networks, umbrella branding, and compulsory trademark licensing. The last part of the paper summarises with a set of principles for competition policy.
    Keywords: competition policy, competition law, antitrust, intellectual property,
    JEL: L4
  2. By: Bruno Versaevel (GATE CNRS); Désiré Vencatachellum (HEC Montréal)
    Abstract: There is evidence that competing firms delegate R&D to the same independent profit-maximizing laboratory. We draw on this stylized fact to construct a model where two firms in the same industry offer transfer payments in exchange of user-specific R&D services from a common laboratory. Inter-firm and within-laboratory externalities affect the intensity of competition among delegating firms on the intermediate market for technology. Whether competition is relatively soft or tight is reflected by each firm's transfer payment offers to the laboratory. This in turn determines the laboratory's capacity to earn profits, R&D outcomes, delegating firms' profits, and social welfare. We compare the delegated R&D game to two other ones where firms (i) cooperatively conduct in-house R&D, and (ii) non-cooperatively choose in-house R&D. The delegated R&D game Pareto dominates the other two games, and the laboratory earns positive profits, only if within-laboratory R&D services are suffciently complementary but inter-firm spillovers are suffciently low. We find no room for policy intervention, because the privately profitable decision to delegate R&D, when the laboratory participates, always benefits consumers.
    Keywords: common agency, externalities, research and development
    JEL: C72 L13 O31
    Date: 2006–10
  3. By: Bruno Versaevel (EM Lyon, GATE CNRS); Vianney Dequiedt (INRA GAEL)
    Abstract: Patent pools are cooperative agreements between several patent owners to bundle the sale of their respective licenses. In this paper we analyze their consequences on the speed of the innovation process. We adopt an ex ante perspective and study the impact of possible pool formation on the incentives to innovate. Because participation in the creation of a pool acts as a bonus reward on R&D activity, we show that a firm’s investment pattern is upward sloping over time before pool formation. The smaller the set of initial contributors, the higher this effect. A pool formation mechanism based on a proposal by the industry and acceptance/refusal by the competition authority may induce overinvestment in early innovations. It also leads a forward looking regulator to delay the clearance date of the pool. This may result in a pool size that is suboptimal from an ex ante viewpoint.
    Keywords: competition policy, licensing, R&D races, research and development
    JEL: L51 O32
    Date: 2007–01
  4. By: TODO Yasuyuki; SHIMIZUTANI Satoshi
    Abstract: This paper investigates the impact of overseas subsidiaries' R&D activities on the productivity growth of parent firms using firm-level panel data for Japanese multinational enterprises. We distinguish between overseas R&D for the utilization and acquisition of foreign advanced knowledge, or innovative R&D, and overseas R&D for the adaptation of technologies and products to local conditions, or adaptive R&D. Our major finding is that overseas innovative R&D helps to raise the productivity growth of the parent firm, while overseas adaptive R&D has no such effect. In addition, we examine whether overseas innovative R&D has an indirect effect on home productivity growth by improving the rate of return on home R&D. However, we find no evidence of such an indirect effect, suggesting that overseas innovative R&D does not engender any knowledge transfers from overseas to home R&D units.
    Date: 2007–03
  5. By: Bruno Versaevel (EM Lyon, GATE CNRS); Désiré Vencatachellum (HEC Montréal)
    Abstract: We use the French portion of the 2002 Community Innovation Survey to test how spillovers a®ect the likelihood that ¯rms cooperate in R&D. Unlike most existing empirical studies, our results clearly support well-established theoretical predictions of the industrial organization literature. We find that a firm which benefits from higher spillovers from her rivals is more likely to cooperate horizontally in R&D. Moreover, the impact of incoming spillovers on the likelihood of horizontal R&D cooperation is positive and statistically significant only when they are above a threshold. Both the value, and the precision of the estimates, increase with the information flow which firms report receiving from their competitors.
    Keywords: cooperation, research and development, spillovers
    JEL: C72 L13 L81
    Date: 2006–10
  6. By: SHIMIZUTANI Satoshi; TODO Yasuyuki
    Abstract: This paper explores what factors determine the nature, extent, and location of Japanese multinationals' R&D activities abroad. Taking advantage of a rich micro-level dataset from the survey on Japanese overseas subsidiaries, the study distinguishes between two types of overseas R&D: innovative and adaptive. We find several differences between the determinants of overseas innovative and adaptive R&D. These differences confirm the view that overseas innovative R&D aims at the exploitation of foreign advanced knowledge, whereas overseas adaptive R&D is mostly influenced by the market size of the host country. Our results provide a convincing and comprehensive explanation of the geographical distribution of overseas R&D by Japanese MNEs.
    Date: 2007–03
  7. By: Corinne Autant-Bernard (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - [CNRS : FRE2938] - [Université Jean Monnet - Saint-Etienne]); Pascal Billand (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - [CNRS : FRE2938] - [Université Jean Monnet - Saint-Etienne]); Christophe Bravard (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - [CNRS : FRE2938] - [Université Jean Monnet - Saint-Etienne]); Nadine Massard (CREUSET - Centre de Recherche Economique de l'Université de Saint-Etienne - [CNRS : FRE2938] - [Université Jean Monnet - Saint-Etienne])
    Abstract: Based on the research projects submitted to the 6th Framework Program of the European Union, this paper studies cooperative networks in micro and nanotechnologies. Our objective is twofold. First, using the statistical tools of the social network analysis, we characterise the structure of the R&D collaborations established between firms. Second, we investigate the determinants of this structure, by analysing the individual choices of cooperation. A binary choice model is used to put forward the existence of network effects alongside other microeconomic determinants of cooperation. Our findings suggest that network effects are present, so that probability of collaboration is influenced by each individual's position within the network. It seems that social distance matters more than geographical distance. We also provide some evidence that similar firms (in terms of research potential) are more likely to collaborate together
    Keywords: Network formation; R&D collaboration; Knowledge externalities; nanotechnologies
    Date: 2007–03–19
  8. By: Jean-Jacques Chanarron (GATE - Groupe d'analyse et de théorie économique - [CNRS : UMR5824] - [Université Lumière - Lyon II] - [Ecole Normale Supérieure Lettres et Sciences Humaines], EMSI - Ecole de Management des Systèmes d'Information - [Ecole de Management de Grenoble]); David Birchall (Henley Management College - [Henley Management College])
    Abstract: There is evidence to suggest that firms wish to work with universities to gain access to new technologies, to knowledge of future technologies and their possible impact and to thechnical problem-solving capability. There is much less evidence to support the proposition that firms work with business models and new processes. The barriers identified include those concerning management and leadership.<br />Following an overview of relevant literature, the research here reported is the outcome of investigations carried out by a network of academics and practitioners from the automotive industry. Though the examination of a number of case studiesof joint efforts, a model for cooperation is developed. Critical success factors for sustainable networks, relating to the different modes of collaboration, are put forward. Finally, areas for further research are identified.
    Keywords: business-school ; universities ; cooperation ; knowledge transfer ; automotive industry ; case studies ; key success factors
    Date: 2007–03–16
  9. By: Eklund, Johan (Jönköping International Business School (JIBS) and CESIS); Wiberg, Daniel (Jönköping International Business School (JIBS) and CESIS)
    Abstract: Economic theory tells us that abnormal firm and industry profits will not persist for any significant length of time. Any firm or industry making profits in excess of the normal rate of return will attract entrants and this competitive process will erode profits. However, a substantial amount of research has found evidence of persistent profits above the norm. Barriers to entry and exit, is an often put forward explanation to this anomaly. In the absence of, or with low barriers to entry and exit, this reasoning provides little help in explaining why these above-norm profits arise and persist. In this paper we explore the links between the systematic search for knowledge and the persistence of profits. By investing in research and development firms may succeed in creating products or services that are preferred by the market and/or find a more cost efficient method of production. Corporations that systematically invest in research and development may, by doing this, offset the erosion of profits and thereby have persistently high profits which diverge from the competitive return.We argue that even in the absence of significant barriers to entry and exit profits may persist. This can be accredited to a systematic search for knowledge through research and development.
    Keywords: Persistence of Profits; Profit Dynamics; R&D; Innovation Activity; Knowledge
    JEL: C10 C32 O10 O32
    Date: 2007–03–13

This nep-ipr issue is ©2007 by Roland Kirstein. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.