nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2010‒11‒13
nine papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. THE PROBLEM OF TRADING PATENTS IN ORGANIZED MARKETS: A dynamic experimental microeconomic system model and informal price theory By Ullberg, Eskil
  2. The Effect of Market Entry on Innovation: Evidence from UK University Incubators By Christian Helmers
  3. Growth Through Heterogeneous Innovations By Ufuk Akcigit; William R. Kerr
  4. Spreading the Word: Geography, Policy and University Knowledge Diffusion By Sharon Belenzon; Mark Schankerman
  5. Foreign patenting in Germany: 1877 - 1932 By Degner, Harald; Streb, Jochen
  6. Property rights and externalities: The uneasy case of knowledge By Ramello, Giovanni B.
  7. Determinants of PRO-industry interactions in pharmaceutical R&D: the case of Mexico By Santiago-Rodriguez, Fernando; Dutrenit, Gabriela
  8. The Tradeoff of the Commons By McAfee, R. Preston; Miller, ALan
  9. International technology diffusion through patents during the second half of the XXth century By M. Teresa Sanchis Llopis; Vicente Esteve Garcia; Antonio Cubel

  1. By: Ullberg, Eskil (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: We are well familiar with the economic analysis of a patent system in terms of a temporary monopoly on products, benefitting from marginal process inventions, formulated under conditions of certain future demands. This article develops an experimental and dynamic microeconomic model useful for studying the patent system as a trade system, where patented technology is exchanged in organized competitive markets, under uncertain future demands. An economic system design is developed to study transparent prices of patents, dynamic gains from using a patent in multiple industries and the coordination of invention, intermediary and innovation activities using a linear contract on patents (fixed fee plus royalty on revenues). A trader is introduced together with inventor and innovator agents in order to multiply the value (use) of the technology. Three mechanism designs and two levels of presumption of validity of the underlying patent right are proposed. The analysis differs from previous work on patents, trade and economics in that the focus is on the competitive pricing of the rights themselves, using demand side bidding. An informal theory is outlined to price the dual values of a patent (investing and blocking). Based on this proposition tentative hypothesis are outlined for two initial experiments using the outlined economic system design.
    Keywords: patents; organized markets; trade; licensing; technology
    JEL: D02 D23 L14 L24 O32 O34
    Date: 2010–08–25
  2. By: Christian Helmers
    Abstract: This paper investigates the effect of market entry of new firms on incumbent firms'innovative activity measured as patent applications. The basic assumption is that the effect ofentry varies by geographical distance between entrants and incumbents due to the presence oflocalized unobserved spillovers. In order to avoid endogeneity problems commonlyassociated with the timing of entry and entrants' location choice, I analyze entry induced bythe establishment of university business incubators, which are usefully exogenous in time andspace. The results show that entry has a statistically and economically significantly positivestrategic effect on incumbent patenting which is attenuated by the geographical distancebetween entrant and incumbent.
    Keywords: Patents, market entry, incubators, spillover
    JEL: L22 L26 O34
    Date: 2010–09
  3. By: Ufuk Akcigit; William R. Kerr
    Abstract: We study how exploration versus exploitation innovations impact economic growth through a tractable endogenous growth framework that contains multiple innovation sizes, multi-product firms, and entry/exit. Firms invest in exploration R&D to acquire new product lines and exploitation R&D to improve their existing product lines. We model and show empirically that exploration R&D does not scale as strongly with firm size as exploitation R&D. The resulting framework conforms to many regularities regarding innovation and growth differences across the firm size distribution. We also incorporate patent citations into our theoretical framework. The framework generates a simple test using patent citations that indicates that entrants and small firms have relatively higher growth spillover effects.
    JEL: L16 O31 O33 O41
    Date: 2010–11
  4. By: Sharon Belenzon; Mark Schankerman
    Abstract: Using new data on citations to university patents and scientific publications, and measures ofdistance based on Google maps, we study how geography affects university knowledgediffusion. We show that knowledge flows from patents are localized in two respects: theydecline sharply with distance up to about 100 miles, and they are strongly constrained bystate borders, controlling for distance. While distance also constrains knowledge spilloversfrom publications, the state border does not. We investigate how the strength of the stateborder effect varies with university and state characteristics. It is larger for patents frompublic, as compared to private, universities and this is partly explained by the localdevelopment policies of universities. The border effect is larger in states with stronger noncompetelaws that affect intra-state labor mobility, and those with greater reliance on in-stateeducated scientists and engineers. We confirm the impact of non-compete statutes bystudying a policy reform in Michigan that introduced such restrictions.
    Keywords: knowledge spillovers, diffusion, geography, university technology transfer,patents, scientific publications
    JEL: K41 L24 O31 O34
    Date: 2010–09
  5. By: Degner, Harald; Streb, Jochen
    Abstract: In this paper, we use both patents' individual life span and foreign patenting activities in Germany to identify the most valuable patents of the 21 most innovative countries (except for Germany) from the European Core, the European periphery and overseas between 1877 and 1932. Our empirical analysis reveals that important characteristics of the international distribution of foreign patents are time-invariant. In particular, the distribution of foreign patents across countries in the late nineteenth and early twentieth centuries was as highly skewed as it was in the late twentieth century - and even dominated by the same major research economies. Our analysis suggests that firms' technological advantages were influenced both by exogenous local factors, such as the countries' resource endowment, and by endogenous factors, such as the national education and research system or the countries' actual stage of economic development. --
    Date: 2010
  6. By: Ramello, Giovanni B.
    Abstract: Drawing from Coase's methodological lesson, this article discusses the specific case of knowledge, which was for a long time chiefly governed by exchange mechanisms lying outside the market, and has only recently been brought into the market. Its recent, heavy "colonization" by the property paradigm has progressively elicited criticism from commentators who, for various reasons, believe that the market can play only a limited role in pursuing efficiency in the knowledge domain. The article agrees with the enounced thesis and tries to provide an explanation of it that relates to the fact that in specific circumstances property-rights can produce distinct market failures that affect the social cost and can consequently prevent attainment of social welfare. In particular, the arguments set forth here concern three distinct externalities that arise when enforcing a property rights system over knowledge. First, the existence of a property right may itself alter individual preferences and social norms, thus causing specific changes in individuals' behaviour. Second, the idiosyncratic nature of knowledge, as a collective and inherently indivisible entity, means that its full propertization can be expected to produce significant harm. Third, property rights can cause endogenous drifts in the market structure arising from the exclusive power granted to the right holder: though generally intended as a necessary mechanism for extracting a price from the consumer, in the knowledge domain property rights can become a device for extracting rents from the market.
    Keywords: property rights, knowledge, invention, externalities, efficiency
    JEL: D23 K11 O31 D62 O34
    Date: 2010–11
  7. By: Santiago-Rodriguez, Fernando (International Development Research Centre, UNU-MERIT); Dutrenit, Gabriela (UAM-Xochimilco)
    Abstract: Interactive learning, particularly between firms and public research organizations (PRO), nurtures the dynamics of systems of innovation. Limited interaction contributes to explain poor performance in R&D and ultimately, in innovation by developing countries. But why this is so? Based on evidence from the pharmaceutical industry in Mexico, this paper identifies some determinants of PRO-industry interaction for pharmaceutical R&D. Particular attention is granted to factors hindering such interactions; arguably the barriers differ throughout the diverse stages of the R&D process. The paper decomposes the Research and Development processes, thus it is possible to identify determinants to interactions in each of those instances. Drug development is further split in two stages: clinical research and drug manufacturing. The analysis indicates that macroeconomic and business environments, firms' strategies, ethical considerations, incentives and perceptions of PRO-industry interaction among the agents in the system, support/hinder interactivity in pharmaceutical R&D.
    Keywords: Public research organizations, pharmaceutical industry, university-industry collaboration, pharmaceuticals, R&D, Mexico
    JEL: O31 O54 L65
    Date: 2010
  8. By: McAfee, R. Preston; Miller, ALan
    Abstract: We develop a model of scarce, renewable resources to study the commons problem. We show that, contrary to conventional wisdom, property rights can often be less efficient than a commons. In particular, we study two effects: (1) waste which arises when individuals expend resources to use a resource unavailable due to congestion and (2) the risk of underutilization of the resource. We provide necessary and sufficient conditions for each effect to dominate the other when the cost of determining the availability of a resource is low.
    Keywords: Tragedy of the Commons; Spectrum; Open Access; Appointments; Property Rights; Reservations
    JEL: D23 K23 D45
    Date: 2010–11–04
  9. By: M. Teresa Sanchis Llopis (Dpto. Análisis Económico); Vicente Esteve Garcia (Universitat de València); Antonio Cubel (Universitat de València)
    Abstract: This paper analyzes the impact of domestic and foreign technology in explaining Total Factor Productivity (TFP) growth during the second half of the 20th century in some advanced countries (the U.S., France, Germany, the U.K. and Japan). To carry out this objective we use new dataset for the stock of knowledge built on the basis of the Perpetual Inventory Method over patents data for 150 years. To empirically address the aim of this research, we extend Coe and Helpman (1995) empirical specification by including human capital. Our results point out that: first, both domestic and foreign stocks of knowledge are significant in explaining TFP growth; second, the imports of knowledge have a less significant effect than the domestic stock of knowledge for France, Germany and Japan. Further, our results point that human capital plays a superior role in explaining TFP growth in the most advanced countries. En este trabajo se analiza el efecto de la tecnología doméstica y extranjera en la evolución de la Productividad Total de los Factores (PTF) para una muestra de países avanzados (Estados Unidos, Francia, Alemania, Reino Unido y Japón) durante la segunda mitad del siglo XX. Para ello se construye una base de datos en la que se mide la tecnología, tanto doméstica como importada, a través de las patentes acumuladas desde 1850 siguiendo el método del inventario permanente. Empíricamente, se estima una versión ampliada de la especificación de Coe and Helpman (1995) en la que incluye la variable capital humano. Los principales resultados permiten concluir que: primero, que tanto la tecnología doméstica como la importada son significativas en la explicación del crecimiento de la PTF; segundo, que las importaciones de tecnología tienen un efecto menor sobre la PTF que la generación doméstica de tecnología en países como Francia, Alemania y Japón, mientras que en Estados Unidos sólo es significativa la tecnología doméstica. Y por último, los resultados revelan una elevada contribución del capital humano en la explicación de la PTF de los países más avanzados.
    Keywords: Europa, segunda mitad del siglo XX, transferencia internacional de tecnología, patentes, productividad, técnicas de cointegración Europe, second half XXth century, international technology transfer, patent, productivity, cointegration techniques
    JEL: N14 O33 O47 O22
    Date: 2010–01

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