nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2007‒10‒20
nine papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Anticommons and optimal patent policy in a model of sequential innovation By Gaston Llanes; Stefano Trento
  2. The Tragedy of the Anti-Commons: A New Problem. An Application to the Fisheries. By José António Filipe; Manuel Alberto M. Ferreira; Manuel Coelho
  3. The puzzle of patent value indicators By Nicolas van Zeebroeck
  4. Different Rules for Different Owners: Does a Non-Competing Patentee have a Right to Exclude? A Study of Post-eBay Cases By Sujitha Subramanian
  5. Cooperation in Innovation Practices among Portuguese Firms: Do Universities Interface Innovative Advances? By Silva, Maria José; Leitão, João
  6. More Secrecy...More Knowledge Disclosure? On Disclosure Outside of Patents By Carlos J Ponce
  7. Knowledge Flows through Social Networks in a Cluster: Interfirm versus University- Industry Contacts By Christian R. Østergaard
  8. The Welfare Effects of Public Drug Insurance By Darius Lakdawalla; Neeraj Sood
  9. How Does the Government (Want to) Fund Science? Politics, Lobbying and Academic Earmarks By John M. de Figueiredo; Brian S. Silverman

  1. By: Gaston Llanes; Stefano Trento
    Abstract: When innovation is sequential, the development of new products depends on the access to previous discoveries. As a consequence the patent system affects both the revenues and the cost of the innovator. We construct a model of sequential innovation in which an innovator uses n patented inputs in R&D to invent a new product. We ask three questions: (i) what is the net effect of patents on innovation as technologies become more complex (n increases)? (ii) are patent pools welfare enhancing? (iii) what is the optimal response of patent policy as technological complexity increases? We find that the answers to these questions depend on the degree of complementarity and substitutability between the inputs used in research.
    Date: 2007–06
  2. By: José António Filipe; Manuel Alberto M. Ferreira; Manuel Coelho
    Abstract: The operation and management of common property resources (“the commons”) have been exhaustively examined in economics and political science, both in formal analysis and in practical applications. “Tragedy of the Commons” metaphor helps to explain why people overuse shared resources. On the other side, Anti-Commons Theory is a recent theory presented by scientists to explain several situations about new Property Rights concerns. An “anti-commons” problem arises when there are multiple rights to exclude. Little attention has been given to the setting where more than one person is assigned with exclusion rights, which may be exercised. We analyze the “anti-commons” problem in which resources are inefficiently underutilized rather than over-utilized as in the familiar commons setting. In fact, these two problems are symmetrical in several aspects.
    Keywords: Anti-Commons Theory; Property Rights
    Date: 2007
  3. By: Nicolas van Zeebroeck (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.)
    Abstract: The objective of this paper is to investigate the consistency of classical patent value indicators (forward citations, grant, families, renewals and oppositions) and the nature of their relationships over a large sample (considering all applications filed to the European Patent Office between 1980 and 2002). The results show that classical indicators are weakly correlated with each other and frequently attribute the highest value to different sets of patents, suggesting that they actually capture different dimensions of patent value and are therefore complements rather than substitutes. This result supports the construction of a composite indicator that would account for all those dimensions in an inclusive way. The proposed composite indicator suggests a declining trend in the average value of patent applications filed to the EPO over the period 1985-1995, justifying concerns over the worldwide boom in patent filings.
    Keywords: Patent systems, Patent quality, Patent value
    JEL: O31 O34 O50
    Date: 2007–08
  4. By: Sujitha Subramanian (Centre for Competition Policy, University of East Anglia)
    Abstract: Courts have traditionally granted injunctive relief ‘automatically’ upon finding infringement of valid patents on the basis that it is the essence of the patent right to exclude others. But the U.S. Supreme Court signalled a change in 2006 when they vacated the Federal Court’s order granting injunction against eBay for willfully infringing valid patents of MercExchange. The ruling comes at a time when the debate on what have pejoratively been called ‘patent trolls’ have taken centre stage. This paper examines the issues connected to patent trolls and analyses cases post-eBay to study the effect that eBay has had on patent infringement litigation. The analysis shows that the economic status of the patentee and the nature of the patent itself can adversely affect the exclusive rights granted by the patent. This is because non-competing patentees and a patent which covers only a small component of the overall product are less likely to obtain an injunctive relief. Denial of injunctive relief results in judicially-instituted compulsory licensing of patents which dramatically scales down the bargaining power of the patentee during licensing fee negotiations. Wrongly being adjudged a ‘troll’ can have dramatic effects on the incentive for investment and innovation. Consequently, the paper argues that acceptance of the concept of patent ‘troll’ is likely to result in more harm to innovation that otherwise.
    Keywords: Patents, patentees, right to exclude, patent trolls, compulsory licensing
    JEL: K19 K20
    Date: 2007–09
  5. By: Silva, Maria José; Leitão, João
    Abstract: This paper aims to identify the nature of the relationships that are established amongst agents who co-operate in terms of innovation practices. It analyses whether the entrepreneurial innovation capability of firms is stimulated through the relationships developed with external partners. The data of 2nd Community Innovation Survey of EUROSTAT is used in a logistic model. In the estimation process of the Logit function, the entrepreneurial innovation capability is considered as the answer variable. The scientific agents who cooperate in terms of innovation activities impact, positively, on the propensity to engage in innovative advances revealed by the firms, at the level of product innovation. The paper presents policy implications, which may be used in the design of public policies for fostering open innovation networks between scientific agents and firms.
    Keywords: Innovation; Networks; Entrepreneurial Innovation Capability.
    JEL: O32 I28 O31 I23
    Date: 2007–10–15
  6. By: Carlos J Ponce
    Date: 2007–10–15
  7. By: Christian R. Østergaard
    Abstract: Knowledge spillovers from a university to the local industry play an important role in clusters, but we know little about these spillovers. This paper examines empirically the extent of university-industry informal contacts. Furthermore, it analyses the characteristics of an engineer that acquire knowledge from informal contacts with university researchers. The university-industry contacts are compared with results for interfirm contacts. The research shows that the interfirm informal contacts are more numerous than university informal contacts. Likewise, knowledge is more frequently acquired from other firms than through university-industry contacts. Engineers that have participated in formal projects with university researchers and engineers that are educated at the university have a higher likelihood of acquiring knowledge from informal contacts with university researchers.
    Keywords: Knowledge flows; informal contacts
    JEL: D83 O32 I23
    Date: 2007
  8. By: Darius Lakdawalla; Neeraj Sood
    Abstract: Rewarding inventors with inefficient monopoly power has long been regarded as the price of encouraging innovation. Public prescription drug insurance escapes that trade-off and achieves an elusive goal: lowering static deadweight loss, while simultaneously encouraging dynamic investments in innovation. As a result of this feature, the public provision of drug insurance can be welfare-improving, even for risk-neutral and purely self-interested consumers. In spite of its relatively low benefit levels, the Medicare Part D benefit generate $3.5 billion of annual static deadweight loss reduction, and at least $2.8 billion of annual value from extra innovation. These two components alone cover 87% of the social cost of publicly financing the benefit. The analysis of static and dynamic efficiency also has implications for policies complementary to a drug benefit: in the context of public monopsony power, some degree of price-negotiation by the government is always strictly welfare-improving, but this should often be coupled with extensions in patent length.
    JEL: H2 H51 I11
    Date: 2007–10
  9. By: John M. de Figueiredo; Brian S. Silverman
    Abstract: This paper examines academic earmarks and their role in the funding of university research. It provides a summary and review of the evidence on the supply of earmarks by legislators. It then discusses the role of university lobbying for earmarks on the demand side. Finally, the paper examines the impact of earmarks on research quantity and quality.
    JEL: H41 O38 P16
    Date: 2007–10

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