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on Intellectual Property Rights |
| By: | Beschorner, Patrick Frank Ernst |
| Abstract: | The traditional argument that shorter product cycles favor trade secret over patenting is reviewed. A game theoretic model provides an argument that shorter product cycles can induce firms to file more patent applications. The firms may be trapped in a prisoners' dilemma where all firms would jointly prefer to patent less and to not have a patent thicket. If firms start applying for patents on technologies which are not yet mature in order to cover ideas that may eventually turn successful, this may create a patent thicket. The transition into a situation where firms start patenting many ideas instead of single mature technologies is initiated and accelerated when network effects are present or patents exhibit a blocking property. |
| Keywords: | patent thicket, product cycles, licensing, network effects |
| JEL: | K2 L1 L2 O31 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7472&r=ipr |
| By: | Cockburn, Iain; MacGarvie, Megan; Müller, Elisabeth |
| Abstract: | We examine the relationship between fragmented intellectual property (IP) rights and innovative performance, taking into consideration the role played by in-licensing of IP. Controlling for a variety of firm and market characteristics, we find that firms facing more fragmented IP landscapes are more likely to report expenditures on in-licensing and for those firms that do incur license costs we find a weak positive association between licensing expenditure and fragmented IP rights in the relevant technology. We also observe a negative relationship between IP fragmentation and innovative performance, but only for firms that engage in in-licensing and only for product innovation. The relationship between fragmentation and innovative performance also depends on the size of a firm’s patent portfolio, which suggests an important strategic role for defensive patenting in the context of fragmented property rights. |
| Keywords: | patent thickets, licensing, innovative performance |
| JEL: | O31 O34 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7475&r=ipr |
| By: | Laura Abramovsky; Helen Simpson |
| Abstract: | We investigate evidence for spatially mediated knowledge transfer from university research. We examine whether firms locate their R&D labs in proximity to university research departments, and whether those that do are more likely to co-operate with, or source information from universities in the course of their innovative activities. We find evidence that pharmaceutical firms locate their R&D facilities near to frontier chemistry research departments, consistent with accessing localised knowledge spillovers, but also linked to the presence of science parks. In industries such as chemicals and vehicles there is less evidence of immediate co-location with universities, but those innovative firms that do locate near to relevant research departments are more likely to engage with universities. |
| Keywords: | Innovation, Geography, spillovers, public research |
| JEL: | O3 R11 R13 I23 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:08/200&r=ipr |
| By: | Andreas Panagopoulos; In-Uck Park |
| Abstract: | The impact of IP protection on the innovation incentives of startup firms is examined in a dynamic model where an incumbent faces a sequence of potential startups and the incumbent's chance of winning an infringement lawsuit increases with the size of its patent portfolio. It is shown that takeover deals generate extra benefits for the incumbent via its enhanced future bargaining positions, a part of which accrues to the current startup as an increased bargaining share. This increased bargaining share can be large enough to justify the startup's innovation activity that would not have taken place otherwise. This effect may be greatest under moderate levels of IP protection, because the increase in the bargaining share, being proportional to the marginal benefits brought by the last patent added to the portfolio, would be too small if the protection was too weak while it would taper off too quickly if the protection was excessive. |
| Keywords: | Patent litigation, takeovers, patent portfolios |
| JEL: | O31 O34 L21 L24 K0 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:bri:cmpowp:08/201&r=ipr |
| By: | Nicolas van Zeebroeck (Centre Emile Bernheim, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussels.) |
| Abstract: | It has long been implicitly assumed that the roaring backlogs experienced by most patent offices around the world – and harshly criticized by many patentees – are a mere mechanical consequence of surging numbers of patent filings. However, different voices suggest that the patent system may sometimes be gamed by an applicant in order precisely to delay the time when a decision will be taken as to the patentability of his application. By empirically showing the impact of several procedural options chosen by patentees in filing their applications at the EPO, this paper clearly demonstrates that this possibility is real, and probably not anecdotal. Deliberate or not, the main consequence of several procedural options is clearly to delay the grant decision. Why and how firms could win any benefit from such strategies can only be guessed, but whether such behaviours are legitimate or not, socially desirable or not, remains an open question. |
| Keywords: | Patent length, Patent value, Renewals, Backlogs, Survival Time Analysis |
| JEL: | O31 O34 O50 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:09-005&r=ipr |
| By: | Philippe Aghion; John Van Reenen; Luigi Zingales |
| Abstract: | We find that institutional ownership in publicly traded companies is associated with more innovation(measured by cite-weighted patents). To explore the mechanism through which this link arises, webuild a model that nests the lazy-manager hypothesis with career-concerns, where institutional ownersincrease managerial incentives to innovate by reducing the career risk of risky projects. The datasupports the career concerns model. First, whereas the lazy manager hypothesis predicts a substitutioneffect between institutional ownership and product market competition (and managerial entrenchmentgenerally), the career-concern model allows for complementarity. Empirically, we reject substitutioneffects. Second, CEOs are less likely to be fired in the face of profit downturns when institutionalownership is higher. Finally, using instrumental variables, policy changes and disaggregating by typeof owner we find that the effect of institutions on innovation does not appear to be due to endogenousselection. |
| Keywords: | Innovation, institutional ownership, career concerns, R&D, productivity |
| JEL: | O31 O32 O33 G20 G32 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0911&r=ipr |
| By: | David B. Audretsch (Indiana University and Max Planck Institute of Economics, Jena, Germany); Werner Bönte (Bergische Universität Wuppertal and Max Planck Institute of Economics, Jena, Germany); Prashanth Mahagaonkar (Max Planck Institute of Economics, Jena, Germany) |
| Abstract: | External finance is central for nascent entrepreneurs, people in the process of starting new ventures. We argue that nascent entrepreneurs use patents and prototypes in order to signal their ability to appropriate the returns from their innovation as well as the project's feasibility. Our analysis of 900 nascent entrepreneurs finds that patents and prototypes increase the likelihood of obtaining equity finance. Thus, if signals are credible, innovation positively impacts external financing. Interestingly, entrepreneurs in planning versus early start-up stage portray different signaling effects, indicating that the relation between finance and innovation depends on the stage of a start-up lifecycle. |
| Keywords: | Innovation, Entrepreneurship, Finance, Information Asymmetries |
| JEL: | L26 M13 G14 G24 G32 O34 |
| Date: | 2009–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2009-012&r=ipr |
| By: | David B. Audretsch / Werner Bönte / Prashanth Mahagaonkar (Indiana University and Max Planck Institute of Economics); Prashanth Mahagaonkar (Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group); Werner Bönte (Schumpeter School of Economics and Business, Bergische Universität Wuppertal and Max Planck Institute of Economics) |
| Abstract: | External finance is central for nascent entrepreneurs, people in the process of starting new ventures. We argue that nascent entrepreneurs use patents and prototypes in order to signal their ability to appropriate the returns from their innovation as well as the project's feasibility. Our analysis of 900 nascent entrepreneurs finds that patents and prototypes increase the likelihood of obtaining equity finance. Thus, if signals are credible, innovation positively impacts external financing. Interestingly, entrepreneurs in planning versus early start-up stage portray different signaling effects, indicating that the relation between finance and innovation depends on the stage of a start-up lifecycle. |
| Keywords: | Innovation; Entrepreneurship; Finance; Information Asymmetries |
| JEL: | L26 M13 G14 G24 G32 O34 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:schdps:sdp09001&r=ipr |
| By: | de Mel, Suresh (University of Peradeniya); McKenzie, David (World Bank); Woodruff, Christopher (University of California, San Diego) |
| Abstract: | Innovation is key to technology adoption and creation, and to explaining the vast differences in productivity across and within countries. Despite the central role of the entrepreneur in the innovation process, data limitations have restricted standard analysis of the determinants of innovation to consideration of the role of firm characteristics. We develop a model of innovation which incorporates the role of both owner and firm characteristics, and use this to determine how product, process, marketing and organizational innovations should vary with firm size and competition. We then use a new large representative survey from Sri Lanka to test this model and to examine whether and how owner characteristics matter for innovation. The survey also allows analysis of the incidence of innovation in micro and small firms, which have traditionally been overlooked in the study of innovation, despite these firms comprising the majority of firms in developing countries. More than one quarter of microenterprises are found to be engaging in innovation, with marketing innovations the most common. As predicted by our model, firm size is found to have a stronger positive effect, and competition a stronger negative effect, on process and organizational innovations than on product innovations. Owner ability, personality traits, and ethnicity are found to have a significant and substantial impact on the likelihood of a firm innovating, confirming the importance of the entrepreneur in the innovation process. |
| Keywords: | innovation, microenterprises, SMEs, development |
| JEL: | O31 L26 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3962&r=ipr |