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on Intellectual Property Rights |
| By: | Deepak Hegde; David C. Mowery; Stuart Graham |
| Abstract: | The continuations procedure within the U.S. patent system has been criticized for enabling firms to manipulate the patent review process for strategic purposes. Changes during the 1990s in patent procedures affected the incentives of applicants to exploit the continuations process, and additional reforms in continuations currently are being considered. Nonetheless, little is known about applicants' use of the three major types of continuations -- the Continuation Application (CAP), the Continuations-In-Part (CIP), and Divisions -- to alter the term and scope of patents. This paper analyzes patents issued from the three types of continuations to U.S. firms during 1981 - 2004 (with priority years 1981 - 2000), and links their frequency to the characteristics of patents, assignees and industries. We find that CIPs are disproportionately filed by R&D-intensive, small firms that patent heavily, and are more common in chemical and biological technologies. Patents resulting from CIP filings contain more claims and backward citations per patent on average, and cover relatively "valuable" inventions. In contrast, CAPs cover less valuable patents from large, capital-intensive firms that patent intensively, particularly in computer and semiconductor patents. We also analyze the effects of the 1995 change in patent term on continuation applications and find that the Act reduced the use of continuations overall, while shifting the output of CAPs toward "less important" patents. |
| JEL: | O3 O31 O32 O34 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13153&r=ipr |
| By: | Carl Shapiro |
| Abstract: | Economists and policy makers have long recognized that innovators must be able to appropriate a reasonable portion of the social benefits of their innovations if innovation is to be suitably rewarded and encouraged. However, this paper identifies a number of specific fact patterns under which the current U.S. patent system allows patent holders to capture private rewards that exceed their social contributions. Such excessive patentee rewards are socially costly, since they raise the deadweight loss associated with the patent system and discourage innovation by others. Economic efficiency is promoted if rewards to patent holders are aligned with and do not exceed their social contributions. This paper analyzes two major reforms to the patent system designed to spur innovation by better aligning the rewards and contributions of patent holders: establishing an independent invention defense in patent infringement cases, and strengthening the procedures by which patents are re-examined after they are issued. Three additional reforms relating to patent litigation are also studied: limiting the use of injunctions, clarifying the way in which "reasonable royalties" are calculated, and narrowing the definition of "willful infringement." |
| JEL: | O3 O30 O31 O34 O38 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13141&r=ipr |
| By: | Schneider, Cédric |
| Abstract: | The aim of this paper is to study the determinants of the outcomes of patent applications (withdrawal, refusal or grant). The application process at the European Patent Office is modelled in three stages, using a Trivariate Probit model with double selectivity correction in order to test whether the applicants ?patenting history has an effect on the outcome of the current application. I investigate the behavior of the applicant after the patent office has established the "state of the art", a precondition to an invention being patentable. The main results are (i) firms with large patents portfolios act following a "trial and error" strategy, by applying for large numbers of patents and thereafter waiting for the patent office?s final decision when the expected probability of grant is high, (ii) the technological importance of a patent is a crucial determinant of a successful application grant, (iii) a withdrawal is to be regarded as an expected refusal, since applicants tend to withdraw their applications when there is evidence that the inventions cannot be considered to be novel or to involve an inventive step. |
| Keywords: | European Patent Office; Intellectual Property Rights |
| JEL: | O34 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3359&r=ipr |
| By: | Mohnen, Pierre (UNU-MERIT and Maastricht University); Bérubé, Charles (Industry Canada) |
| Abstract: | This paper looks at the effectiveness of R&D grants for Canadian plants that already benefit from R&D tax credits. Using a non-parametric matching estimator, we find that firms that benefited from both policy measures introduced more new products than their counterparts that only benefited from R&D tax incentives. They also made more world-first product innovations and were more successful in commercializing their innovations. |
| Keywords: | Innovations, R&D, Matching Estimators, Mahalanobis, Innovation Survey, Tax Credits, Grants |
| JEL: | O31 O32 O38 C13 H25 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2007015&r=ipr |
| By: | Michael Fritsch (University of Jena, School of Busniess and Economics, Max Planck Institute of Economics Jena, and Institute for Economic Research (DIW Berlin)); Viktor Slavtchev (University of Jena, School of Busniess and Economics) |
| Abstract: | Innovation processes are characterized by a pronounced division of labor between actors. Two types of externality may arise from such interactions. On the one hand, a close location of actors affiliated to the same industry may stimulate innovation (MAR externalities). On the other hand, new ideas may be born by the exchange of heterogeneous and complementary knowledge between actors, which belong to different industries (Jacobs' externalities). We test the impact of both MAR as well as Jacobs' externalities on innovative performance at the regional level. The results suggest an inverted u-shaped relationship between regional specialization in certain industries and innovative performance. Further key determinants of the regional innovative performance are private sector R&D and university-industry collaboration. |
| Keywords: | Innovation, technical efficiency, patents, agglomeration concentration, specialization, diversity, regional analysis. |
| JEL: | O31 O18 R12 |
| Date: | 2007–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-018&r=ipr |
| By: | van Pottelsberghe, Bruno; van Zeebroeck, Nicolas |
| Abstract: | The renewal of patents and their geographical scope for protection constitute two essential dimensions in a patent’s life, and probably the most frequently used patent value indicators. The intertwining of these dimensions (the geographical scope of protection may vary over time) makes their analysis complex, as any measure along one dimension requires an arbitrary choice on the second. This paper proposes a new indicator of patent value, the Scope-Year index, combining the two dimensions. The index is computed for patents filed at the EPO from 1980 to 1996 and validated in its member states. It shows that the average value of patent filings has increased in the early eighties but has constantly decreased from the mid-eighties until the mid nineties, despite the institutional expansion of the EPO. This result sheds a new and worrying light on the worldwide boom in patent filings. |
| Keywords: | geographical scope; patent families; patent statistics; Patent value; renewals |
| JEL: | K1 L1 O34 O38 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6321&r=ipr |
| By: | Khazabi, Massoud |
| Abstract: | The paper proposes a theory of innovation and market structure. The model incorporates n firms with horizontal spillovers all interacting within a hypothetical industry. In a two-stage sequential game framework, four types of cooperation are studied: full non-cooperation; cooperation in both stages; cooperation only in the R&D stage; and simultaneous cooperation and non-cooperation in the R&D stage. It is shown that the effect of competition on total innovation investment varies among all four cases and mostly depends on the level of spillover. |
| Keywords: | R&D; Innovation; competition; cooperation; spillover; market structure |
| JEL: | L1 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3436&r=ipr |
| By: | Iain M. Cockburn; Stefan Wagner |
| Abstract: | We examine the effect of patenting on the survival prospects of 356 internet-related firms that IPO'd at the height of the stock market bubble of the late 1990s. By March 2005, nearly 2/3 of these firms had delisted from the NASDAQ exchange. Although changes in the legal environment in the US in the 1990s made it much easier to obtain patents on software and, ultimately, on business methods, less than half of the firms in this sample obtained, or attempted to obtain, patents. For those that did, we hypothesize that patents conferred competitive advantages that translate into higher probability of survival, though they may also simply be a signal of firm quality. Controlling for age, venture-capital backing, financial characteristics, and stock market conditions, patenting is positively associated with survival. Quite different processes appear to govern exit via acquisition compared to exit via delisting from the exchange due to business failure. Firms that applied for more patents were less likely to be acquired, though obtaining unusually highly cited patents may make them more attractive acquisition target. These findings do not hold for business method patents, which do not appear to confer a survival advantage. |
| JEL: | L0 L26 L86 O34 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13146&r=ipr |
| By: | Maskus, Keith E. (Department of Economics); Ganslandt, Mattias (Research Institute of Industrial Economics (IFN)) |
| Abstract: | The existence of parallel imports (PI) raises a number of interesting policy and strategic questions, which are the subject of this survey article. For example, parallel trade is essentially arbitrage within policy-integrated markets of IPR-protected goods, which may have different prices across countries. Thus, we analyze fully two types of price differences that give rise to such arbitrage. First is simple retail-level trade in horizontal markets because consumer prices may differ. Second is the deeper, and more strategic, issue of vertical pricing within the common distribution organization of an original manufacturer selling its goods through wholesale distributors in different markets. This vertical price control problem presents the IPR-holding firm a menu of strategic choices regarding how to compete with PI. Another strategic question is how the existence of PI might affect incentives of IPR holders to invest in research and development (R&D). The global research-based pharmaceutical firms, for example, strongly oppose any relaxation of restrictions against PI of drugs into the United States, arguing that the potential reduction in profits would diminish their ability to innovate. There is a close linkage here with price controls for medicines, which are a key component of national health policies but can give rise to arbitrage through PI. We also discuss the complex economic relationships between PI and other forms of competition policy, or attempts to limit the abuse of market power offered by patents and copyrights. Finally, we review the emerging literature on how policies governing PI may affect international trade agreements. |
| Keywords: | IPR; Parallel Imports; International Arbitrage; Research and Development |
| JEL: | F15 K21 L14 |
| Date: | 2007–03–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0704&r=ipr |
| By: | Amegashie, J. Atsu |
| Abstract: | In a world where the private protection of property is costly, government redistribution can lead to an increase in aggregate output. This result is not new. The novelty of this paper lies in specifying the conditions under which this efficiency-enhancing redistribution improves everyone’s welfare including the welfare of those whose labor finances the redistributive program (i.e., the rich) and how this is affected by the protection of property rights. The state may directly enhance economic rights through investments in security and the protection of property or it may indirectly do so through the redistribution of income. Under certain conditions, redistribution becomes desirable in situations where the state has exhausted its ability to enhance efficiency through the direct enforcement of property rights. In this case, redistribution can make all members of a society better off. Specifically, this occurs when the cost of predation is sufficiently low and the technology of private protection of property rights is sufficiently weak. The adverse effects of redistribution may be the consequence but not the cause of state failure. The real cause is a corrupt and inept state. |
| Keywords: | efficiency; incomplete property rights; predation; redistribution; welfare. |
| JEL: | D6 K0 H2 |
| Date: | 2006–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3438&r=ipr |