nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2011‒05‒24
eleven papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Products, patents and productivity persistence: A DSGE model of endogenous growth By Holden, Tom
  2. Modeling Agricultural Innovation in a Rapidly Developing Country: The Case of Chinese Pesticide Industry By Shi, Guanming; Pray, Carl
  3. Protection of Intellectual Property while Outsourcing By Sen Gupta, Rajorshi; Love, H. Alan
  4. Unraveling the Role of Public Researcher Mobility for Industrial Innovation By Ejsing, Ann-Kathrine; Kaiser, Ulrich; Kongsted, Hans Christian
  5. Impact of University Intellectual Property Policy on the Performance of University-Industry Research Collaboration By Hiroyuki Okamuro; Junichi Nishimura
  6. University-Industry interactions and knowledge transfer mechanisms: a critical survey By Azele Mathieu
  7. Pharmaceutical Use Following Generic Entry: Paying Less and Buying Less By Peter J. Huckfeldt; Christopher R. Knittel
  8. Enforcing IPR through Informal Institutions: The possible role of religion in fighting software piracy By Nora Elbialy; Moamen Gouda
  9. Dispute Settlement at the WTO: Impacts of a No Deal in the US-Brazil Cotton Dispute By Lakatos, Csilla; Walmsley, Terrie L.
  10. What motivates academic scientists to engage in research commercialization: ‘gold’, ‘ribbon’ or ‘puzzle’? By Lam, Alice
  11. Show Me the Right Stuff: Signals for High Tech Startups By Annamaria Conti; Marie C. Thursby; Frank Rothaermel

  1. By: Holden, Tom
    Abstract: This paper builds a dynamic stochastic general equilibrium (DSGE) model of endogenous growth that is capable of generating substantial degrees of endogenous persistence in productivity. When products go out of patent protection, the rush of entry into their production destroys incentives for process improvements. Consequently, old production processes are enshrined in industries producing non-protected products, resulting in aggregate productivity persistence. Our model also generates sizeable delayed movements in productivity in response to preference shocks, providing a form of endogenous news shock. Finally, if we calibrate our model to match a high aggregate mark-up then we can replicate the negative response of hours to a positive technology shock, even without the inclusion of any frictions.
    Keywords: productivity persistence; patent protection; oligopoly; research and development
    JEL: E32 E37 L16 O31 O33 O34
    Date: 2011–05
  2. By: Shi, Guanming; Pray, Carl
    Abstract: Technology and innovation play an increasingly important role in the economic development of both developed and developing countries. We investigate how policy and market factors influence firmsâ (or other potential innovatorsâ) decisions on innovation or imitation by developing a conceptual model and then empirically testing it using pesticide innovation data from a rapidly developing country, China. We find that the government encouraged local innovation by opening regions to more international trade, more investment in public research and education, strengthening intellectual property right (IPR) enforcement, and limiting the role of foreign inventors. However, the role of the extension of patent life in the early 1990s has little impact. Theory and some of our measures of market size suggest that this factor also is important, but the empirical evidence is mixed. The results suggest that the government policies for openness, public research and education and IPR enforcement can encourage innovation. Limiting foreign invention could encourage more local patenting but might limit Chinese farmersâ access to new technology.
    Keywords: Innovation, Pesticide, China, Patent, Agribusiness, Agricultural and Food Policy, Crop Production/Industries, International Development, Research and Development/Tech Change/Emerging Technologies, O31, O34, O38,
    Date: 2011
  3. By: Sen Gupta, Rajorshi; Love, H. Alan
    Abstract: Food and Beverage companies need to share their Intellectual Property (IP) when they outsource production and/or R&D to contract agents. IP sharing can facilitate misappropriation and the contractor may eventually start competing with the client. We design an incentive compatible contract that can protect company IP. A two-pronged strategy is proposed: Companies should share less know-how and give high incentive payments to deter IP misappropriation. Strategies like product differentiation may be highly useful to deter piracy.
    Keywords: Intellectual Property Protection, Outsourcing, Product Differentiation, R&D, Agribusiness, Industrial Organization, Risk and Uncertainty, L14, L21, L23, L66, 031, 032, 034,
    Date: 2011–05
  4. By: Ejsing, Ann-Kathrine (Danish Insurance Association); Kaiser, Ulrich (University of Zurich); Kongsted, Hans Christian (University of Copenhagen)
    Abstract: We estimate the relative contribution of mobile scientists who leave academia for the private sector on the subsequent innovative performance of the firms they join. We use data on the population of Danish firms and their R&D workers for the period 1999-2004 and measure innovation performance by the (value-adjusted) number of patent applications at the European Patent Office. We compare the efficacy of mobile former university scientists to the effects of mobile workers hired from other firms as well as immobile workers on the innovation performance of their employer. Our main result is that mobile university scientists contribute substantially more to innovation than R&D workers hired from other firms who, in turn, contribute slightly less to industrial innovation than recent university graduates. By contrast, immobile workers add little to the innovative activity of their employer. We also find that the contribution of mobile R&D workers to innovation depreciates fairly rapidly. These findings provide us with three main managerial implications: Firstly, hiring scientists from universities is a way of boosting a firm's innovative activity. Secondly, because hires from academia receive lower wages on average than hires from private sector firms, this implies that hiring R&D workers from academia may be a cost-effective way of improving innovation performance. Thirdly, firms need to take measures in order to further public-private researcher interaction to prevent the depreciation of the knowledge stock of their employees.
    Keywords: labor mobility, technology transfer, innovation, patents
    JEL: O33 O34 C23
    Date: 2011–05
  5. By: Hiroyuki Okamuro; Junichi Nishimura
    Abstract: Despite various expected advantages, university-industry research collaboration (UIC), a relationship between two different worlds, often faces serious difficulties. Thus, the performance of UIC depends on the research partners' strategies to bridge the gaps between them according to the institutional environment. In Japan, UIC has developed rapidly since the late 1990s based on drastic institutional changes regarding universities. We pay special attention to the role of the university intellectual property (IP) policy introduced after 2003 and empirically examine its impact on the performance of UIC projects. A clear and equitable IP policy that can be applied flexibly to the needs of partners would be optimal for a UIC to be efficiently managed. Otherwise, the project might face serious conflicts of interests and low incentive for cooperation. Using a sample of Japanese firms from our original survey, we find that the IP policy of partner universities indeed has a positive and significant impact on various performances of UIC projects, controlling for firm and project characteristics and considering potential selection bias from UIC participation.
    Keywords: intellectual property, research collaboration, small business, Japan
    JEL: D23 L24 O32 O34
    Date: 2011–05
  6. By: Azele Mathieu
    Abstract: This article reviews the literature on knowledge transfer mechanisms (KTMs) used in university-industry interactions. The literature may be articulated around four dimensions: (i) the relative importance of KTM as perceived by the involved stakeholders, (ii) the factors affecting the organisation of university-industry interactions, (iii) the interrelatedness of different KTMs and, (iv) the impact of increased university-interactions on traditional academic missions. An outstanding fact stemming from this review is that spin-offs and patents are not considered by the university and the industry as the most important KTMs. Traditional KTMs, such as publications or collaborative research however, are perceived as more significant ways of transferring knowledge. A large variety of factors influence the use of a KTM (for instance, characteristics of researchers or of the involved firms). While some trends may be outlined, not much is known so far about the interweaving of different KTMs. Consequently, no simple model of knowledge transfer between universities and the business sector is possible, and should certainly not be restricted to “new” KTMs. As regards to the risks of increased reliance of university on the business sector, I suggest that those risks could be limited under some conditions.
    Keywords: Knowledge transfer mechanisms; University-industry interactions; Impact on academic research
    JEL: L30 O31 O34
    Date: 2011–05
  7. By: Peter J. Huckfeldt; Christopher R. Knittel
    Abstract: We study the effects of generic entry on prices and utilization using both event study models that exploit the differential timing of generic entry across drug molecules and cast studies. Our analysis examines drugs treating hypertension, high blood pressure, type 2 diabetes, and depression using price and utilization data from the Medical Expenditure Panel Survey. We find that utilization of drug molecules starts decreasing in the two years prior to generic entry and continues to decrease in the years following generic entry, despite decreases in prices offered by generic versions of a drug. This decrease coincides with the market entry and increased utilization of branded reformulations of a drug going off patent. We show case study evidence that utilization patterns coincide with changes in marketing by branded drug manufacturers. While the reformulations---often extended-release versions of the patent-expiring drug---offer potential health benefits, the FDA does not require evidence that the reformulations are improvements over the previous drug in order to grant a patent. Indeed, in a number of experiments comparing the efficacies of the patent-expiring and reformulated drugs do not find statistical differences in health outcomes calling into question the patent-extension policy.
    JEL: I18 L11 M3 O31 O38
    Date: 2011–05
  8. By: Nora Elbialy (University of Hamburg); Moamen Gouda (University of Marburg)
    Abstract: The existence of formal IPR laws can be considered a prerequisite for having efficient law enforcement but does not imply efficient enforcement in itself. A simple model is constructed to explain the interplay between the IPR law and human behavior within counterfeiting countries. It shows how a politically monitored IPR enforcement strategy is able to alter formal IPR laws or institutions but might not affect informal institutions, or human morals and behavior, to the same extent, hence barely affecting piracy situation. The model shows the essential role of informal institutions and its sanction mechanisms in the enforcement process. The main obstacle of IPR enforcement is that people are still not convinced that IPR violations are unethical. Religion can be considered an informal institution that might support or hinder formal laws issued with regards to IPR and hence influence de facto enforcement of laws, especially in countries with high piracy rate if a high adherence to religion is found. As the Religion-Loyalty Index (RLI) developed by this study shows, Muslim countries have the highest religiosity level among different religions. Consequently, an investigation of how Islamic jurisprudence views IPR piracy is conducted. As Islam generally prohibits IPR piracy, a set of policy recommendations based on new institutional perspective is presented that can effectively help in minimizing IPR piracy in developing countries in general and Muslim ones in specific.
    Keywords: Intellectual Property Rights (IPR), Formal vs. Informal Institutions, New Institutional Economics (NIE), Software Piracy, Religion, Enforcement
    JEL: K39 K42 L86 Z12
    Date: 2011
  9. By: Lakatos, Csilla; Walmsley, Terrie L.
    Abstract: On the day before Brazil was to start imposing retaliatory sanctions against the US in the WTO dispute settlement case regarding unfair domestic and export upland cotton subsidies, the parties have reached a preliminary concession aimed at settling this 8-year-long trade dispute. In this paper, we explore the economy wide impacts of a no deal with speciï¬c emphasis on intellectual property retaliation in a computable general equilibrium framework. As awarded by a WTO dispute settlement panel, Brazil would have been entitled to $591 million in retaliatory sanctions in goods sectors and $238 million in intellectual property sanctions. We ï¬nd that retaliation by Brazil would have led to welfare gains for all countries except the US. Most importantly however, had Brazil not been allowed to retaliate in the form of suspension of intellectual property rights, the impact of trade retaliation alone would have been negative for both Brazil and the US, a case of shooting oneself in the foot to shoot at the other personâs foot.
    Keywords: dispute settlement, WTO, intellectual property, computable general equilibrium, International Relations/Trade, C68, F13, Q17,
    Date: 2011
  10. By: Lam, Alice
    Abstract: This paper employs the three concepts of ‘gold’ (financial rewards), ‘ribbon’ (reputational/career rewards) and ‘puzzle’ (intrinsic satisfaction) to examine the extrinsic and intrinsic aspects of scientists’ motivation for pursuing commercial activities. The study is based on 36 individual interviews and an on-line questionnaire survey of 735 scientists from five major UK research universities. It finds that there is a diversity of motivations for commercial engagement, and that many do so for reputational and intrinsic reasons and that financial rewards play a relatively small part. The paper draws on self-determination theory in social psychology to analyse the relationship between scientists’ value orientations with regard to commercial engagement and their personal motivations. It finds that those with traditional beliefs about the separation of science from commerce are more likely to be extrinsically motivated, using commercialization as a means to obtain resources to support their quest for the ‘ribbon’. In contrast, those identify closely with entrepreneurial norms are intrinsically motivated by the autonomy and ‘puzzle-solving’ involved in applied commercial research while also motivated by the ‘gold’. The study highlights the primacy of scientists’ self motivation, and suggests that a fuller explanation of their commercial behaviour will need to consider a broader mix of motives to include the social and affective aspects of intrinsic motivation. In conclusion, the paper argues that policy to encourage commercial engagement should build on reputational and intrinsic rather than purely financial motivations.
    Keywords: Academic scientists; entrepreneurial university; motivation; scientific norms and values; self-determination theory; research commercialization; knowledge transfer
    JEL: L2 I23 O31
    Date: 2010–12
  11. By: Annamaria Conti; Marie C. Thursby; Frank Rothaermel
    Abstract: We examine the potential for technology startups to use patents and founders, friends and family money (FFF money) as signals to attract business angel and venture capital funds, patents reflect technology quality and FFF money reflects founder commitment. We find that if investors value technology quality more (less) than founder commitment, the optimal mix of signals is a relatively higher (lower) use of patents than FFF money. Regardless of investor preferences, high quality founders should invest more in both signals than in the absence of private information. This investment is inversely related to the opportunity cost of investing in the signals. We test these predictions empirically and find evidence in support of this proposition. When we distinguish between venture capitalist and business angel investment, we find that patents serve as a signal for venture capitalists and FFF money is a signal for business angels (but not vice versa).
    JEL: G24
    Date: 2011–05

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