nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2007‒09‒24
seven papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. The Effect of Contractual Complexity on Technology Sourcing Agreements By Hansen, Zeynep; Higgins, Matthew
  2. Intellectual Property Protection and Technology Transfer: Evidence From US Multinationals By Sunil Kanwar
  3. Cooperative R&D under Uncertainty with Free Entry By Nisvan Erkal:Daniel Piccinin
  4. Which Reputations Does a Brand Owner Need? Evidence from Trade Mark Opposition By Georg von Graevenitz
  5. Do Mergers of Potentially Dominant Firms foster Innovation? An Empirical Analysis for the Manufacturing Sector By Elena Cefis; Anna Sabidussi; Hans Schenk
  6. Measuring Regional Innovativeness - A Methodological Discussion and an Application to One German Industry By Tom Broekel; Thomas Brenner
  7. The Role of Innovation in Merger Policy: Europe’s Efficiency Defence versus America’s Innovation Markets Approach By Elena Cefis; Mark Grondsma; Anna Sabidussi; Hans Schenk

  1. By: Hansen, Zeynep; Higgins, Matthew
    Abstract: Most research on strategic alliances ignores the underlying contracts that govern the terms of the relationship. This is problematic since it is how these contracts are structured that determines how firms will benefit from a relationship. We present a novel method to analyze contractual complexity in a multi-dimensional framework in an attempt to link together the contractual complexity and control rights literatures. We find that the stage of development, age and prevalence of the underlying technology most influence complexity. Contractual complexity also influences the allocation of control rights. We also explore the importance of prior relationships on the underlying contract.
    Keywords: Contractual complexity; Control rights; Strategic alliances; Biopharmaceutical industry; Contractual design
    JEL: L2 G3
    Date: 2007–09–17
  2. By: Sunil Kanwar (Department of Economics, UC San Diego)
    Abstract: This paper investigates wheter, in what direction, and to what extent one mode of technology transfer is influenced by the strength of intellectual property protection that host nations provide. Using data spanning the period 1977 - 1999, we find little support for the claim that strengthening intellectual property rights will have any sizable effect on the magnitude of overseas R&D investment by (US) multinationals. Any semblance of a positive relationship between these two variables vanishes the moment we introduce country fixed effects and time fixed effects into the regressions. One implication of our resutls is, that ceteris paribus, stronger intellectual property rights in the developing countries pursuant to the TRIPs agreement may not have any significant influence on technology transfer into thes countries via overseas R&D.
    Keywords: intellectual property, technology transfer, overseash r&d,
    Date: 2007–07–01
  3. By: Nisvan Erkal:Daniel Piccinin
    Abstract: In the last few decades, the effects of cooperative R&D arrangements on innovation and welfare have played an important role in policy making. The goal of this paper is to analyze the effects of cooperative R&D arrangements in a model with a stochastic R&D process and output spillovers. Our main innovation is to allow for free entry in both the R&D race and the product market. To determine the desirability of cooperation in R&D environments, we compare three different ways of organizing R&D activities: R&D competition, R&D cartels, and RJV cartels. In contrast with the literature, we assume that cooperative R&D arrangements do not have to include all of the firms in the industry. We show that sharing of research outcomes is a necessary condition for the profitability of cooperative R&D arrangements with free entry. The profitability of RJV cartels depends on their size. The impact of cooperative R&D arrangements on the aggregate level of innovation depends on whether there are participants in the R&D race who are a part of the cooperative R&D arrangement. If some outsiders choose to participate in the R&D race, the aggregate rate of innovation remains unaffected by the formation of a cooperative R&D arrangement. Otherwise, it increases. R&D cartels may be welfare-improving in cases when they cause the aggregate rate of innovation to increase. In such cases, it may be desirable to subsidize them. Since sharing of R&D outcomes affects the equilibrium number of firms in the product market after the R&D race, the consumer welfare effects of RJV cartels are sensitive to the specification of consumer preferences. Subsidies may be desirable in cases of larger RJVs since they are the ones which are less likely to be profitable.
    Keywords: Cooperative R&D; Research joint ventures; Free entry; Uncertain R&D; Technology spillovers.
    JEL: L1 L4 O3
    Date: 2007
  4. By: Georg von Graevenitz (Georg von Graevenitz,, INNO-tec, Munich School of Management, Kaulbachstraße 45, D 80539,Munich.)
    Abstract: At least two: the reputation of their brand and a reputation for being tough on imitators of this brand. Sustaining a brand requires both investment in its reputation amongst consumers and the defence of the brand against followers that infringe upon it. I study the defence of trade marks through opposition at a trade mark office. A structural model of opposition and adjudication of trade mark disputes is presented. This is applied to trade mark opposition in Europe. Results show that brand owners can benefit from a reputation for tough opposition to trade mark applications. Such a reputation induces applicants to settle trade mark opposition cases more readily.
    Keywords: trade marks, opposition, intellectual property rights, reputation
    JEL: K41 L00 O31 O34
    Date: 2007–07
  5. By: Elena Cefis; Anna Sabidussi; Hans Schenk
    Abstract: We investigate the effects of M&A on innovation in the specific context of potential or realized market dominance. Authorities are challenged by balancing both detrimental and beneficial effects of mergers on innovation, especially when a merger threatens to result in market dominance, while firms would wish to uncover all the potential benefits arising from M&A. The effects of M&As on innovation have been tested on a panel dataset, constructed from the Dutch Community Innovation Survey and the Dutch Business Register, including around 1000 manufacturing companies. We have adopted a comprehensive approach, taking into consideration three dimensions of innovation: innovation inputs, innovation outputs and efficiency. The results show that M&As performed in the previous 3-5 years have a positive and significant effect on innovation except R&D expenses and innovation efficiencies. The results also suggest that technological regimes are critical to understanding the patterns of innovation.
    Keywords: Mergers and Acquisitions, Innovation, Market Dominance
    JEL: C14 D21 L11 L25
    Date: 2007–09
  6. By: Tom Broekel (Max Planck Institute of Economics, Evolutionary Economics Group); Thomas Brenner (Max Planck Institute of Economics, Evolutionary Economics Group)
    Abstract: The regional or national innovation performance has been repeatedly measured in the literature; but it has so far not been discussed what this means, especially in relation to a region. What is the contribution of a region to innovation output? The usual approaches implicitly assume that higher innovation outputs per inhabitant, employee, or R+D employee can be assigned to a region. We argue that more insights are gained if we distinguish between various mechanisms that influence the innovation activities in a region. Different analyses need to be conducted, using different variables and including different local factors. Furthermore, we see no justification for using a linear dependence of innovation activity on the number of inhabitants or employees as a benchmark for performance. We use a method that takes into account these arguments and apply it to the Electrics + Electronics industry in Germany.
    Keywords: Regional innovation performance, regional innovativeness, non-parametric performance analysis, measurement of regional innovativeness
    JEL: R11 R15 O31
    Date: 2007–09–17
  7. By: Elena Cefis; Mark Grondsma; Anna Sabidussi; Hans Schenk
    Abstract: Changes in the world’s economies and discussions in the literature about the growing importance of innovation to firms have given rise to a demand for expanding the analysis of merger policy. The present study focuses on the different criteria used to assess the impact of M&A activities on innovation. The analysis is both theoretical and empirical. From a theoretical perspective, two main approaches are discussed: the efficiency defence approach, adopted in Europe, and the innovation markets doctrine as developed in the United States. The present paper contributes to the literature by suggesting that an integration of the two approaches would significantly improve M&A assessment. On the empirical side, two cases that have been scrutinised by both the European Commission and the U.S. Federal Trade Commission are discussed. The results show the relevance of the different approaches used when dealing with innovation in the assessment of mergers.
    Keywords: Mergers and Acquisitions, Innovation, Efficiency Defence
    JEL: C14 D21 L11 L25
    Date: 2007–09

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