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on Intellectual Property Rights |
| By: | Carolin Haeussler; Dietmar Harhoff; Elisabeth Müller |
| Abstract: | This paper investigates how patent applications and grants held by new ventures improve their ability to attract venture capital (VC) financing. We argue that investors are faced with considerable uncertainty and therefore rely on patents as signals when trying to assess the prospects of potential portfolio companies. For a sample of VC-seeking German and British biotechnology companies we have identified all patents filed at the European Patent Office (EPO). Applying hazard rate analysis, we find that in the presence of patent applications, VC financing occurs earlier. Our results also show that VCs pay attention to patent quality, financing those ventures faster which later turn out to have high-quality patents. Patent oppositions increase the likelihood of receiving VC, but ultimate grant decisions do not spur VC financing, presumably because they are anticipated. Our empirical results and interviews with VCs suggest that the process of patenting generates signals which help to overcome the liabilities of newness faced by new ventures. |
| Keywords: | patents, venture capital, intellectual property rights, R&D, biotechnology |
| JEL: | O30 O34 L20 L26 G24 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:253&r=ipr |
| By: | Katharine Rockett |
| Abstract: | We survey the economics literature on optimal patent design. We first outline the patent right and the basic economic effects of the patent on innovation. Models that use frictions instead of patents to generate rewards to innovation and models of trade secrecy are considered briefly. The patent design papers are divided into those that model a single innovation, those dealing with cumulative innovation, and more recent papers focussing on complementary innovations. Disclosure issues are presented in a separate section. Finally, enforcement of patents and the interactions between patents and competition policy are considered. |
| Date: | 2009–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:esx:essedp:663&r=ipr |
| By: | Gerlagh , Reyer (University of Manchester); Kverndokk, Snorre (Ragnar Frisch Centre for Economic Research); Rosendahl, Knut Einar (Research Department, Statistics Norway) |
| Abstract: | This paper addresses the timing and interdependence between innovation and environmental policy in a model of research and development (R&D). On a first-best path the environmental tax is set at the Pigouvian level, independent of innovation policy. With infinite patent lifetime, the R&D subsidy should be constant and independent of the state of the environment. However, with finite patent lifetime, optimal innovation policy depends on the stage of the environmental problem. In the early stages of an environmental problem, abatement research should be subsidized at a high level and this subsidy should fall monotonically over time to stimulate initial R&D investments. Alternatively, with a constant R&D subsidy, patents’ length should initially have a very long life-time but this should be gradually shortened. In a second-best situation with no deployment subsidy for abatement equipment, we find that the environmental tax should be high compared to the Pigouvian levels when an abatement industry is developing, but the relative difference falls over time. That is, environmental policies will be accelerated compared to first-best. |
| Keywords: | Environmental policy; research and development; innovation studies; patents |
| JEL: | H21 O30 Q42 |
| Date: | 2008–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2008_010&r=ipr |
| By: | Sean Flynn; Aidan Michael Hollis; Mike Palmedo |
| Abstract: | This paper offers an economic rationale for compulsory licensing of needed medicines in developing countries. The patent system is based on a trade-off between the “deadweight losses†caused by market power and the incentive to innovate created by increased profits from monopoly pricing during the period of the patent. However, markets for essential medicines under patent in developing countries with high income inequality are characterized by highly convex demand curves, producing large deadweight losses relative to potential profits when monopoly firms exercise profit-maximizing pricing strategies. As a result, these markets are systematically ill-suited to exclusive marketing rights, a problem which can be corrected through compulsory licensing. Open licenses that permit any qualified firm to supply the market on the same terms, such as may be available under licenses of right or essential facility legal standards, can be used to mitigate the negative effects of government-granted patents, thereby increasing overall social welfare. |
| Date: | 2009–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:clg:wpaper:2009-01&r=ipr |
| By: | Daron Acemoglu; Kostas Bimpikis; Asuman E. Ozdaglar |
| Date: | 2009–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:814577000000000081&r=ipr |
| By: | De Silva, Dakshina G.; McComb, Robert P. |
| Abstract: | If localized knowledge spillovers are present in the university setting, higher rates of both start-ups and/or survival than in the broader economy would be observed in areas that are geographically proximate to the university. Using a fully-disclosed Quarterly Census of Employment and Wages for Texas for the years 1999:3-2006:2, this paper analyzes start-ups and exit rates for high-tech firms in Texas. We find that there is evidence that the presence of a research institution will affect the likelihood of technology start-ups. However, results suggest that geographic proximity to knowledge centers does not reduce hazard rates. |
| Keywords: | Entry and Survival; R & D; Regional; Urban; and Rural Analyses. |
| JEL: | R53 O18 R12 |
| Date: | 2009–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13022&r=ipr |