nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2007‒03‒31
seven papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Economics and the design of patent systems By Robert M. Hunt
  2. An Empirical Analysis of the Effects of Patents and Secrecy on Knowledge Spillovers By Schmidt, Tobias
  3. Location and R&D alliances in the European ICT industry By Narula, Rajneesh; Santangelo, Grazia D.
  4. Harnessing Success: Determinants of University Technology Licensing Performance By Sharon Belenzon; Mark Schankerman
  5. Innovation Without Magic Bullets: Stock Pollution and R&D Sequences By Timo Goeschl; Grischa Perino
  6. On Backstops and Boomerangs: Environmental R&D under Technological Uncertainty By Timo Goeschl; Grischa Perino
  7. Stagnation in the Drug Development Process: Are Patents the Problem? By Dean Baker

  1. By: Robert M. Hunt
    Abstract: The author uses intuition derived from several of his research papers to make three points. First, in the absence of a common law balancing test, application of uniform patentability criteria favors some industries over others. Policymakers must decide the optimal tradeoff across industries. Second, if patent rights are not closely related to the underlying inventions, more patenting may reduce R&D in industries that are both R&D and patent intensive. Third, for reasons largely unrelated to intellectual property, the U.S. private innovation system has become far more decentralized than it was a generation ago. It is reasonable to inquire whether a patent system that worked well in an era of more centralized innovation functions as well for the more decentralized environment of today.
    Date: 2007
  2. By: Schmidt, Tobias
    Abstract: Theoretical considerations suggest that secrecy reduces spillovers almost completely through non-disclosure, while the disclosure requirement of patents generates some spillover and at the same time allows firms to appropriate knowledge. In this paper we empirically analyze whether protection by secrecy or protection by patents is associated with lower knowledge spillovers. Since the amount of knowledge spillovers is hard to measure directly, we look at the impact of the usage of protection methods in an industry on the innovation activities of firms using external knowledge. One goal is to assess if firms have moved to a more open innovation business model, i.e. allow more knowledge spillovers to occur despite using protection methods. Our estimations show that the usage of both, patents and secrecy, hinders the innovation activities of firms through the reduction of spillovers to firms in their own industry. We conclude that the appropriability effect of patents outweighs the disclosure effect. We also find some evidence that the open innovation business model has not been implemented widely.
    Keywords: Knowledge Spillovers, patents, secrecy, open innovation, ordered probit
    Date: 2006
  3. By: Narula, Rajneesh (University of Reading Business School); Santangelo, Grazia D. (Facoltà di Scienze Politiche, Università degli Studi di Catania)
    Abstract: This paper shows empirically that in an intra-industry oligopolistic scenario the location of a firm's innovative activities plays an important role in determining its partner selection in R&D alliances. Such a role is mainly attributed to a strategic use of R&D alliances as a means to limit knowledge flows and protect competences, rather than to promote knowledge flows. By drawing on a novel dataset matching alliances and patent data for the European ICT industry, the econometric analysis shows that partners' prior co-location (at both national and sub-national regional level), previous ties and technological overlap matter in the choice of partner, while common nationality has a negative impact on alliance formation.
    Keywords: alliances, strategy, efficiency, R&D location
    JEL: D23 F23 O18 O32 R3
    Date: 2008
  4. By: Sharon Belenzon; Mark Schankerman
    Abstract: We study the impact of incentive pay, local development objectives and government constraints onuniversity licensing performance. We develop and test a simple contracting model of technologylicensing offices, using new survey information together with panel data on U.S. universities for1995-99. We find that private universities are much more likely to adopt incentive pay than publicones, but ownership does not affect licensing performance conditional on the use of incentive pay.Adopting incentive pay is associated with about 30-40 percent more income per license. Universitieswith strong local development objectives generate about 30 percent less income per license, but aremore likely to license to local (in-state) startup companies. Stronger government constraints are'costly' in terms of foregone license income and startup activity. These results are robust to controlsfor observed and unobserved heterogeneity.
    Keywords: incentives, performance pay, universities, technology transfer, licensing, localdevelopment
    JEL: O31 O32 O33 F23
    Date: 2007–02
  5. By: Timo Goeschl (University of Heidelberg, Department of Economics); Grischa Perino (University of Heidelberg, Department of Economics)
    Abstract: We study the optimal R&D trajectory in a setting where new technologies are never perfect backstops in the sense that there is no perfectly clean technology that eventually solves the pollution problem once and for all. New technologies have stings attached, i.e. each emits a specific stock pollutant. Damages are convex in individual pollution stocks but additive across stocks, creating gains from diversification. The research and pollution policies are tightly linked in such a setting. We derive the optimal pollution path and R&D program. Pollution stocks overshoot and in the long run all available technologies produce. Research is sequential and the optimal portfolio of technologies is finite.
    Keywords: horizontal innovation, stock pollution, backstop technology, multistage optimal control, pollution thresholds, overshooting
    JEL: Q55 Q53 O32 C61
    Date: 2006–12
  6. By: Timo Goeschl (University of Heidelberg, Department of Economics); Grischa Perino (University of Heidelberg, Department of Economics)
    Abstract: The literature on environmental R&D frequently studies innovation as a two-stage process, with a single R&D event leading from a conventional polluting technology to a perfectly clean backstop. We allow for uncertainty in innovation in that the new technology may turn out to generate a new pollution problem. R&D may therefore be optimally undertaken more than once. Using and externding recent results from multi-stage optimal control theory, we provide a full characterization of the optimal pollution and R&D policies. The optimal R&D program is strictly sequential and has an endogenous stopping point. Uncertainty drives total R&D effort and its timing.
    Keywords: stock pollution, backstop technology, multi-stage optimal control, pollution thresholds, uncertainty
    JEL: Q55 Q53 O32 C61
    Date: 2007–01
  7. By: Dean Baker
    Abstract: The rate of new drug development has stagnated, in spite of large increases in both private and public sector spending on biomedical research. The flip side of slower progress is higher drug costs. The cost of developing new drugs has been rising at an average real rate of more than 7 percent since 1987. This report considers the ways in which government patent monopolies distort incentives so that pharmaceutical companies may not opt to minimize research costs. It documents some of the perverse incentives created by patent monopolies in drugs.
    JEL: O31 O32 O34 O38 L12 I18 H21 D42
    Date: 2007–03

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