nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2009‒07‒03
six papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Dealing with Excessive Off-label Drug Use: Liability vs. Patent Prolongation By Stefan Felder; Anja Olbrich
  2. Patent Pools and Cross-Licensing in the Shadow of Patent Litigation By Choi, Jay Pil
  3. Creative Destruction and Productive Preemption By Norbäck, Pehr-Johan; Persson, Lars; Svensson, Roger
  4. A universidade deve patentear as suas invenções? By Luciano Martins Costa Póvoa
  5. Does Private Equity Investment Spur Innovation? Evidence from Europe. By Alexander Popov; Peter Roosenboom
  6. Accumulation of Technological Capabilities and Economic Development: Did Brazil’s Regime of Intellectual Property Rights Matter? By Roberto Mazzoleni; Luciano Martins Costa Póvoa

  1. By: Stefan Felder; Anja Olbrich
    Abstract: The US and the EU recently introduced regulation to curb the extent of risky off-label drug use. It offers manufacturers a prolongation of patent protection or exclusivity if they invest in pediatric clinical tests. This paper shows that a reinforcement of physician liability for off-label use may be the preferred instrument for achieving dynamic efficiency. The liability threat reduces the demand for off-label use, giving manufacturers an appropriate incentive to invest in extended approval. By contrast, patent prolongation does not affect physicians' prescription decisions and increases the likelihood of investments in cases where the induced additional benefit falls short of testing costs.
    Keywords: Off-label use, patent protection, exclusivity, liability
    JEL: I11 K13
    Date: 2009–06
  2. By: Choi, Jay Pil
    Abstract: This paper develops a framework to analyze the incentives to form a patent pool or engage in cross-licensing arrangements in the presence of uncertainty about the validity and coverage of patents that makes disputes inevitable. It analyzes the private incentives to litigate and compares them with the social incentives. It shows that pooling arrangements can have the effect of sheltering invalid patents from challenges. This result has an antitrust implication that patent pools should not be permitted until after patentees have challenged the validity of each other’s patents if litigation costs are not too large.
    Date: 2009–03
  3. By: Norbäck, Pehr-Johan (Research Institute of Industrial Economics (IFN)); Persson, Lars (Research Institute of Industrial Economics (IFN)); Svensson, Roger (Research Institute of Industrial Economics (IFN))
    Abstract: We develop a theory of commercialization mode (entry or sale) of entrepreneurial inventions into oligopoly, and show that an invention of higher quality is more likely to be sold (or licensed) to an incumbent due to strategic product market effects on the sales price. Moreover, preemptive acquisitions by incumbents are shown to stimulate the process of creative destruction by increasing the entrepreneurial effort allocated to high-quality invention projects. Using detailed data on patents granted to small firms and individuals, we find evidence that high-quality inventions are often sold, and that they are sold under bidding competition.
    Keywords: Acquisitions; Entrepreneurship; Innovation; Start-ups; Patent; Ownership; Quality
    JEL: G24 L10 L20 M13 O30
    Date: 2009–06–10
  4. By: Luciano Martins Costa Póvoa (Curso de Ciencias Economicas, Universidade Federal de Goiás)
    Abstract: This paper discusses the question: should universities patent their inventions or should not? The question is analyzed through the lens of the logic of the scientific production. It is also considered the critics pointed in the literature and presented and discussed the results of an original survey on technology transfer from universities and public labs in Brazil. It is discussed the existence of a trade-off between the free access to new scientific knowledge and the agility of university’s inventions commercialization. It is argued that the question should be “how” should universities patent their inventions instead of “should or not”. From the society welfare point-of-view, universities should try licensing without exclusivity in order to assure that the invention reach the highest number of firms interested in the development of the invention. It would be desirable to concede research excuses for those interested in the use of university patents for scientific research purposes. Este artigo discute se a universidade deve patentear ou não suas invenções com base na análise da lógica da produção científica, das críticas apontadas na literatura e nos resultados de um survey sobre a transferência de tecnologia de universidades e institutos públicos de pesquisa no Brasil realizado a partir dos dados do Diretório de Grupos de Pesquisa no Brasil – CNPq, censo de 2004. A partir dessas análises é apontada a existência de um complexo trade-off entre a divulgação científica com o livre acesso para desenvolvê-la e a agilização do processo de comercialização das invenções. Como solução para este trade-off é argumentado que este problema deve ser abordado questionando-se “como” a universidade deve patentear em vez de “se deve” patentear ou não. A resposta sugerida passa pela formulação dos contratos de licenciamento. É desejável, do ponto de vista do bem-estar da sociedade, que a universidade tente licenciar as suas tecnologias sem exclusividade para garantir que a invenção esteja disponível ao máximo de interessados possível. Somente no caso desse tipo de licenciamento não encontrar interessados, a universidade deveria oferecer um contrato de exclusividade. Também seria desejável que as universidades concedessem uma “licença para pesquisa” para os pesquisadores interessados em usar o conhecimento protegido pelas patentes com a finalidade de promover o avanço da pesquisa científica.
    Keywords: Patent, university, science
    JEL: O30 O34
    Date: 2009–06
  5. By: Alexander Popov (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Peter Roosenboom (Erasmus University Rotterdam, Burgemeester Oudlaan 50, 3062 PA Rotterdam, Netherlands.)
    Abstract: We provide the first cross-country evidence of the effect of investment by private equity firms on innovation, focusing on a sample of European countries and using Kortum and Lerner’s (2000) empirical methodology. Using an 18-country panel covering the period 1991-2004, we study how private equity finance affects patent applications and patent grants. We address concerns about causality in several ways, including exploiting variation in laws regulating the investment behaviour of pension funds and insurance companies across countries and over time. We also control for the standard determinants of innovation like R&D, human capital, and patent protection. Our estimates imply that while private equity investment accounts for 8% of aggregate (private equity plus R&D) industrial spending, PE accounts for as much as 12% of industrial innovation. We also present similar evidence from the biotech industry to alleviate concerns that our results are biased by aggregation. JEL Classification: C23, G15, O16.
    Keywords: private equity, venture capital, innovation.
    Date: 2009–06
  6. By: Roberto Mazzoleni (Hofstra University, Department of Economics); Luciano Martins Costa Póvoa (Curso de Ciencias Economicas, Universidade Federal de Goiás)
    Abstract: This paper presents an historical analysis of the role of intellectual property rights and the accumulations of technological capabilities in Brazil. The aircraft, pharmaceutical and oil industries are analyzed in detail. While Brazil was then among the pioneers worldwide in recognizing the social value of inventive activities and the importance of protecting and rewarding the work of inventors, both the industrialization of the country and the development of technological capabilities have lagged significantly behind the creation of patent laws. Key reasons for this include the weak incentives for innovation in industries that grew behind the walls of protectionist policies and the second-order significance of IPR in the sectors where the accumulation of technological capabilities was a direct focus of other policy instruments. Este artigo apresenta uma análise histórica sobre o papel das leis de patentes na acumulação de capacidades tecnológicas da indústria brasileira. Em particular, são analisadas as indústrias aeronáutica, farmacêutica e de extração de petróleo. Embora o Brasil tenha sido um dos primeiros países a conceder patentes a inventores, tanto o processo de industrialização quanto o desenvolvimento de capacidades tecnológicas ficaram atrasados em relação à criação das primeiras leis de patentes. Entre as principais razões para este atraso estão os fracos incentivos para a inovação durante o período de substituição de importação e o papel apenas secundário das patentes em setores em que a acumulação de capacidades tecnológicas foi foco de outros instrumentos de política industrial.
    Date: 2009–05

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