nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2008‒09‒13
thirteen papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. The Knowledge Production of ‘R’ and ‘D’ By Czarnitzki, Dirk; Kraft, Kornelius; Thorwarth, Susanne
  2. The Impact of the Distribution of R&D Expenses on Firms’ Motivations to Patent By Barros, Henrique M.
  3. Defensive Publishing: An Empirical Study By Joachim Henkel; Stefanie Pangerl
  4. Licensing Uncertain Patents: Per-Unit Royalty vs Up-Front Fee By David Encaoua; Yassine Lefouili
  5. Would global patent protection be too weak without international coordination? By Edwin L.-C. Lai
  6. Appropriability and the Patenting Process: An Exploratory Analysis of Pharmaceuticals By Barros, Henrique M.
  7. How Much Does Immigration Boost Innovation? By Jennifer Hunt; Marjolaine Gauthier-Loiselle
  8. Trade Unions go global! By Guido Cozzi; Francesco Schettino
  9. You Won the Battle. What about the War? A Model of Competition between Proprietary and Open Source Software By Riccardo Leoncini; Francesco Rentocchini; Giuseppe Vittucci Marzetti
  10. Moral Rights Protection for the Visual Arts By Melissa Boyle; Debra O'Connor; Stacy Nazzaro
  11. What determines the academic and professional participation of economists? By Mishra, SK
  12. Can We Test for Bias in Scientific Peer-Review? By Oswald, Andrew J.
  13. Biotechnology and the Development of Food Markets: Retrospect and Prospects By GianCarlo Moschini

  1. By: Czarnitzki, Dirk; Kraft, Kornelius; Thorwarth, Susanne
    Abstract: Many studies investigate the relationship between R&D expenditures as an input and patents as an intermediate product or output of a knowledge production function. We suggest that the productivity of research in patent production functions has been underestimated in the literature, as scholars typically use information about R&D, i.e. the sum of research expenditure and development expenditure, due to data availability. However, in most industries only (applied) research will lead to patentable knowledge, and development happens after the initial research phase that may have led to a patent. Instead of using data on R&D, we separate the knowledge creating process into `R’ and `D’. This data stems from R&D surveys of Belgian firms. It turns out that only the `R’ part of R&D expenditure has a significant effect on patents and that development expenditure are insignificant. Thus previous literature relying on R&D expenditure suffers from a measurement error, such that the coefficient of R&D is biased towards zero, as R&D includes a large fraction of irrelevant expenditure, i.e. development expenditure, with respect to patenting.
    Keywords: Patents, Research, Development, Knowledge Production Function
    JEL: O31 O32
    Date: 2008
  2. By: Barros, Henrique M.
    Date: 2008–10
  3. By: Joachim Henkel; Stefanie Pangerl
    Abstract: Defensive Publishing denotes publication of an invention with the purpose of creating prior art, and thus preventing patents being granted on this invention. Although widely employed, it has hardly been investigated empirically. Our study is based on 56 in-depth interviews, among others with most industrial firms in the German DAX 30 stock index. We find that 70 percent of the companies in our sample use defensive publications, for up to one third of their inventions. Interestingly, we find that the patent system itself is frequently used for defensive publishing. Our findings also challenge contributions connecting defensive publishing to patent races.
    Keywords: Defensive publication; Intellectual property; Freedom to operate; Patens
    JEL: O32 O34 M21
    Date: 2008
  4. By: David Encaoua (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Yassine Lefouili (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: In this paper we examine the implications of uncertainty over patent validity on patentholders' licensing strategies. Two licensing mechanisms are examined: per-unit royalty and up-front fee.We provide conditions under which uncertain patents are licensed in order to avoid patent litigation. It is shown that while it is possible for the patentholder to reap som e "extra profit" by selling an uncertain patent under the pure per-unit royalty regime, the opportunity to do so does not exist under a pure up-front fee regime. We also establish that the relatively high bargaining power the licensor has even when its patent is weak can be reduced if the patentholder cannot refuse to license an unsucessful challenger or if collective challenges are allowed for. Furthermore we show that the patentee may prefer to license through the per-unit royalty mechanism rather than the fixed fee mechanism, especially if its patent is weak. This finding contradicts the traditional theoretical result that fixed fee licensing dominates royalty rate licensing from the patentholder's perspective.
    Date: 2008–07
  5. By: Edwin L.-C. Lai (Research Department, Federal Reserve Bank of Dallas)
    Abstract: I extend the Grossman and Lai (2004) model to answer the question, “Would global patent protection be too weak without international coordination?†by introducing firmbiased government preferences and trade barriers in the model. I make use of the estimates of the firm-bias parameter from the political economy literature to proxy for the degree of governments’ firm-bias. Then I calculate the range of trade barriers that is sufficient to give rise to under-protection of patents in the global system without international policy coordination in IPR protection. I make the judgement that the true trade barrier between countries very likely falls within this range of under-protection. Therefore, I conclude that there was probably under-protection of patents without international policy coordination in IPR protection. It means that the free-rider problem with a large number of independent players overrides the effects of firm-bias and trade barriers, giving rise to too low a rate of innovation in the world. Allowing for the possibility that countries discriminate against foreign firms in Nash equilibrium does not change this conclusion. The problem can possibly be corrected by international coordination in intellectual property rights (IPR) protection.
    Keywords: Intellectual property rights, TRIPS, innovation
    JEL: F1 O31 O34
    Date: 2005–11
  6. By: Barros, Henrique M.
    Date: 2008–10
  7. By: Jennifer Hunt; Marjolaine Gauthier-Loiselle
    Abstract: We measure the extent to which skilled immigrants increase innovation in the United States by exploring individual patenting behavior as well as state-level determinants of patenting. The 2003 National Survey of College Graduates shows that immigrants patent at double the native rate, and that this is entirely accounted for by their disproportionately holding degrees in science and engineering. These data imply that a one percentage point rise in the share of immigrant college graduates in the population increases patents per capita by 6%. This could be an overestimate of immigration's benefit if immigrant inventors crowd out native inventors, or an underestimate if immigrants have positive spill-overs on inventors. Using a 1950-2000 state panel, we show that natives are not crowded out by immigrants, and that immigrants do have positive spill-overs, resulting in an increase in patents per capita of about 15% in response to a one percentage point increase in immigrant college graduates. We isolate the causal effect by instrumenting the change in the share of skilled immigrants in a state with the initial share of immigrant high school dropouts from Europe, China and India. In both data sets, the positive impacts of immigrant post-college graduates and scientists and engineers are larger than for immigrant college graduates.
    JEL: J61 O31
    Date: 2008–09
  8. By: Guido Cozzi; Francesco Schettino
    Abstract: Patent or article citations reflect the consequences of a published idea on the discovery of new ideas. We draw a simple theoretical model predicting that the shape of the future citations of an idea can reveal the complexity of its innovative research spillover. We apply this method to the patent forward citations in the US industries.
    Keywords: Patent Forward Citations, Technological Complexity, Skewness.
    JEL: O31 O33
    Date: 2008–08
  9. By: Riccardo Leoncini; Francesco Rentocchini; Giuseppe Vittucci Marzetti
    Abstract: Although open source software has recently attracted a relevant body of economic literature, a formal treatment of the process of com- petition with its proprietary counterpart is still missing. Starting from an epidemic model of innovation di?usion, we try to ?ll this gap. We propose a model where the two competing technologies depend on dif- ferent factors, each one speci?c to its own mode of production (prof- its and developers’ motivations respectively), together with network e?ects and switching costs. As the speed of di?usion of these tech- nologies is crucial for the ?nal outcome, we endogenize the parame- ter in?uencing it across the population of adopters. We ?nd that an asymptotically stable equilibrium where both technologies coexist can always be present and, when the propagation coe?cient is endogenous, it coexists with winner–take–all solutions. Furthermore, an increase in the level of the switching costs for one technology increases the num- ber of its adopters, while reducing the number of the other one. If the negative network e?ects increase for one of the two technologies, then the equilibrium level of users of that technology decrease.
    Keywords: Increasing returns; Open-source software; Technological competition; Technology di?usion
    JEL: L17 L86 O33
    Date: 2008
  10. By: Melissa Boyle (Department of Economics, College of the Holy Cross); Debra O'Connor (Department of Economics, College of the Holy Cross); Stacy Nazzaro (Department of Economics, College of the Holy Cross)
    Abstract: Beginning in 1979, certain states extended extra copyright protection, known as "moral rights" protection, to visual artists. Moral rights protection, which was incorporated into U.S. copyright law in 1990, ensures that works cannot be altered in a manner that would negatively impact the reputation of the artist. Using difference-in-differences regression strategies, we compare artists and non-artists in states with moral rights laws to those in states without these laws, before and after the laws are enacted. This enables us to test the impact of the laws on the behavior of artists, consumers, and policy makers. Our analysis reveals that artists’ incomes fall by over $4000 per year as a result of moral rights legislation, but we find no impact of the laws on artists’ choices of residence or on state-level public spending on the arts.
    Keywords: copyright, moral rights, Visual Artists Rights Act of 1990 (VARA)
    JEL: Z11
    Date: 2008–08
  11. By: Mishra, SK
    Abstract: The IDEAS publishes every month the rankings of economists (and departments of economics including research institutions working in the related areas) in different countries. These rankings are based on a large number of measures. It is observed that economists of some countries participate more vigorously in academic and professional activities. This paper investigates into the factors responsible for variations in participation of economists of different countries in academic and professional activities reflected in their intellectual output.
    Keywords: Economist; participation; rankings; IDEAS; RePEc; intellectual output; human development; less developed countries; journal articles; working papers; SSRN
    JEL: A11 A14
    Date: 2008–09–08
  12. By: Oswald, Andrew J. (University of Warwick)
    Abstract: Science rests upon the reliability of peer review. This paper suggests a way to test for bias. It is able to avoid the fallacy – one seen in the popular press and the research literature – that to measure discrimination it is sufficient to study averages within two populations. The paper’s contribution is primarily methodological, but I apply it, as an illustration, to data from the field of economics. No scientific bias or favoritism is found (although the Journal of Political Economy discriminates against its own Chicago authors). The test’s methodology is applicable in most scholarly disciplines.
    Keywords: discrimination, citations, science, peer-review system
    JEL: H8
    Date: 2008–08
  13. By: GianCarlo Moschini (Center for Agricultural and Rural Development (CARD))
    Abstract: Biotechnology has had an important impact on the agricultural and food industries over the last twelve years by way of fast and extensive adoption of a few genetically modified (GM) crops. This has produced large efficiency gains, including higher yields and reduced costs of weed and pest control, as well as some environmental benefits. The expected development of crops with additional agronomic traits, and with output traits to improve the nutrition and health attributes of food products, holds the potential for even more pervasive impacts. Full realisation of such promises may require overcoming the constraining effects of restrictive GM product regulations.
    Keywords: biotechnology, genetically modified products, innovation, regulation, research and development.
    JEL: Q16 Q18 O33 L51
    Date: 2008–08

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