nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2012‒02‒20
fifteen papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. A Changing Climate: Statistical Evidence of the Intellectual Property Landscape of Clean Energy Technologies By Ghafele, Roya; Gibert, Benjamin
  2. R&D Productivity and Firm Size in Semiconductors and Pharmaceuticals: Evidence from Citation Yields By Burak Dindaroglu
  3. Innovation or Imitation? The effect of spillovers and competitive pressure on firms’ R&D strategy choice By Slivko, Olga; Theilen, Bernd
  4. Promoting Competition by Coordinating Prices: When Rivals Share Intellectual Property By Gallini, Nancy
  5. Patents, secret innovations and firm's rate of return : differential effects of the innovation leader By Alvaro Escribano; Szabolcs Blazsek
  6. Shared Rights and Technological Progress By Mitchell, Matthew; Zhang, Yuzhe
  7. Financing University Research By Ghafele, Roya
  8. Cross-border intellectual property rights: contract enforcement and absorptive capacity By A. Naghavi; Y. Tsai
  9. Technology Variation vs. R&D Uncertainty: What Matters Most for Energy Patent Success? By David Popp; Nidhi Santen; Karen Fisher-Vanden; Mort Webster
  10. Economic Analysis of Pay-for-delay Settlements and Their Legal Ruling By Gratz, Linda
  11. Determinants of Renewable Energy Innovation: environmental policies vs. market regulation By Francesco Vona; Francesco Nicolli; Lionel Nesta
  12. The emergence of care robotics: A publication and patent analysis By Göldner, Moritz; Herstatt, Cornelius; Tietze, Frank; Rehder, Saskia
  13. Issues in the Post-2005 TRIPS agenda By Benjamin Coriat; Luigi Orsenigo
  14. Intellectual property related development aid: is supply aligned with demand? By Ghafele, Roya; Engel, Jakob
  15. From Natural-Resource Commons to Knowledge Commons: Common Traits and Differences By Benjamin Coriat

  1. By: Ghafele, Roya; Gibert, Benjamin
    Abstract: The intellectual property (IP) system plays an important role in the development and diffusion of technologies by determining the institutional context in which transactions occur. This article reviews the recent EPO report ‘Patents and Clean Energy Technologies: Bridging the Gap between Evidence and Policy’ and offers further insights into the interplay between patents, innovation in climate change mitigating technologies and access to technology. Empirical evidence and analysis of patent trends forms the basis for understanding the spectrum of policy choices available to combat climate change. In an effort to bridge the gap between policy and evidence, the EPO report provides ample statistical analysis of existing patenting trends, fleshes out the current patent landscape and assesses licensing trends in emerging technologies relating to climate change. This review evaluates these statistical insights and discusses the implications for both the developed and developing world. It aims to deepen understanding of how intellectual property influences the development of markets for green technologies.
    Keywords: Climate Change Mitigating Technologies; Patent Statistics; European Patent Office; Technology Transfer
    JEL: O30 O34 L41
    Date: 2011–10–20
  2. By: Burak Dindaroglu (Department of Economics, Izmir University of Economics)
    Abstract: Using firm level panel data from the U.S., I explore the relationship between firm size and R&D productivity for two important and R&D-intensive industries: Semiconductors and Pharmaceuticals. I employ two measures of a firm's R&D performance: the number of citations received per patented innovation, and the number of citations received per dollar of R&D expenditures. The former is a measure of the average quality of a firm's patents, and the latter is a measure of total R&D output obtained per dollar of investments. I find that the average quality of patents (citations received per patent) falls with firm size in Pharmaceuticals, but there is no relationship between patent quality and firm size in Semiconductors. Citations received per R&D dollar decrease with size in both industries, which is due to the well-documented negative relationship between patents per R&D and firm size.
    Keywords: R&D Productivity, Firm size, Patents, Citations, Semiconductors, Pharmaceuticals, Panel data
    JEL: L1 L2
    Date: 2011–11
  3. By: Slivko, Olga; Theilen, Bernd
    Abstract: This article provides a theoretical and empirical analysis of a firm's optimal R&D strategy choice. In this paper a firm's R&D strategy is assumed to be endogenous and allowed to depend on both internal firms. characteristics and external factors. Firms choose between two strategies, either they engage in R&D or abstain from own R&D and imitate the outcomes of innovators. In the theoretical model this yields three types of equilibria in which either all firms innovate, some firms innovate and others imitate, or no firm innovates. Firms'equilibrium strategies crucially depend on external factors. We find that the efficiency of intellectual property rights protection positively affects firms'incentives to engage in R&D, while competitive pressure has a negative effect. In addition, smaller firms are found to be more likely to become imitators when the product is homogeneous and the level of spillovers is high. These results are supported by empirical evidence for German .rms from manufacturing and services sectors. Regarding social welfare our results indicate that strengthening intellectual property protection can have an ambiguous effect. In markets characterized by a high rate of innovation a reduction of intellectual property rights protection can discourage innovative performance substantially. However, a reduction of patent protection can also increase social welfare because it may induce imitation. This indicates that policy issues such as the optimal length and breadth of patent protection cannot be resolved without taking into account specific market and firm characteristics. Journal of Economic Literature Classification Numbers: C35, D43, L13, L22, O31. Keywords: Innovation; imitation; spillovers; product differentiation; market competition; intellectual property rights protection.
    Keywords: Empreses -- Innovacions tecnològiques, Diferenciació de productes, Propietat intel·lectual, 33 - Economia, 65 - Gestió i organització. Administració i direcció d'empreses. Publicitat. Relacions públiques. Mitjans de comunicació de masses,
    Date: 2011–09
  4. By: Gallini, Nancy
    Abstract: The paper examines technology agreements and the standards process from which they emerge when members supply inputs to the alliance while simultaneously competing with it. Under this overlapping ownership structure, pool members are horizontally related. I show that strategic complementarity between the downstream products owned by a member and those arising from the collaboration is sufficient for a pool to be pro-competitive. Although patent pools are more efficient than uncoordinated pricing, consumers are better off if an outside firm rather than a pool member owns the non-pool competing product. Antitrust rules facilitating efficient IP agreements under overlapping ownership and their implications for the direction of technological change are derived.
    Keywords: Patent Pools, Intellectual Property, Antitrust Policy
    Date: 2012–02–07
  5. By: Alvaro Escribano; Szabolcs Blazsek
    Abstract: This paper studies the dynamic interactions and the spillovers that exist among patent application intensity, secret innovation intensity and stock returns of a well-defined technological cluster of firms. We study the differential behavior when there is an Innovation Leader (IL) and the rest of the firms are Innovation Followers (IFs). The leader and the followers of the technological cluster are defined according to their patent innovation activity (stock of knowledge). We use data on stock returns and patent applications of a panel of technologically related firms of the United States (US) economy over the period 1979 to 2000. Most firms of the technological cluster are from the pharmaceutical-products industry. Interaction effects and spillovers are quantified by applying several Panel Vector Autoregressive (PVAR) market value models. Impulse Response Functions (IRFs) and dynamic interaction multipliers of the PVAR models are estimated. Secret patent innovations are estimated by using a recent Poisson-type patent count data model, which includes a set of dynamic latent variables. We show that firms’ stock returns, observable patent intensities and secret patent intensities have significant dynamic interaction effects for technologically related firms. The predictive absorptive capacity of the IL is the highest and this type of absorptive capacity is positively correlated with good firm performance measures. The innovation spillover effects that exist among firms, due to the imperfect appropriability of the returns of the investment in R&D, are specially important for secret innovations and less relevant for observed innovations. The flow of spillovers between followers and the leader is not symmetric being higher from the IL to the IFs.
    Keywords: Patent count data model, Stock market value, Secret innovations, Absorptive capacity, Technological proximity, Panel Vector Autoregression (PVAR), Impulse Response Function (IRF), Efficient Importance Sampling (EIS)
    JEL: C15 C31 C32 C33 C41
    Date: 2012–01
  6. By: Mitchell, Matthew; Zhang, Yuzhe
    Abstract: We study how best to reward innovators whose work builds on earlier innovations. Incentives to innovate are obtained by offering innovators the opportunity to profit from their innovations. Since innovations compete, awarding rights to one innovator reduces the value of the rights to prior innovators. We show that the optimal allocation involves shared rights, where more than one innovator is promised a share of profits from a given innovation. We interpret such allocations in three ways: as patents that infringe on prior art, as licensing through an optimally designed ever-growing patent pool, and as randomization through litigation. We contrast the rate of technological progress under the optimal allocation with the outcome if sharing is prohibitively costly, and therefore must be avoided. Avoiding sharing initially slows progress, and leads to a more variable rate of technological progress.
    Keywords: Cumulative Innovation; Patent; Licensing; Patent Pool; Litigation
    JEL: O34 D82 O31 D43 L53
    Date: 2012–01
  7. By: Ghafele, Roya
    Abstract: While the detailed mechanisms of the interplay of knowledge creation and economic growth have been discussed in great detail by endogenous growth theory, this paper is interested in assessing the role that universities play in the knowledge based economy. It does so at the example of best practice scenarios, as currently being undertaken by the University of Oxford, U.C. Berkeley, the M.I.T. and Chalmers School of Technology. It argues that key to successful research commercialization is the leverage of clusters and networks that assure knowledge flows between universities and business. We call this the ‘Third Way’ of university research commercialization, which focuses on systemic change, rather than on single stakeholder intervention. It reflects a novel generation of knowledge policies that focuses on training, awareness raising and the leverage of cluster effects, rather than the development of physical infrastructure (i.e. science parks). This is a unique approach that outperforms existing best practice in many ways; i.e. it focuses on the leverage of networks among the various academic institutions, rather than repeating the traditional ‘one university – one technology transfer office’ approach. The ‘Third Way’ also outperforms existing best practices by adopting latest trends in intellectual property management , such as online trading, perceiving intellectual property as a financial asset and leveraging open innovation for improving patent quality. Organizational values, structures & procedures of various actors (business, academia, government) are recognized and different institutional cultures are sought to be overcome through boundary spanning. The competing demands and interests of business and academia are reflected through the introduction of ‘social responsible university research commercialization’, as currently undertaken by U.C. Berkeley.
    Keywords: Technology Transfer; Research Funding; Intellectual Property; Chalmers School of Technology; U.C. Berkeley; Oxford University
    JEL: O34 O32
    Date: 2012–01–10
  8. By: A. Naghavi; Y. Tsai
    Abstract: This paper studies cross-border intellectual property rights (IPR) as a North-South contract using a Nash bargaining approach and distinguishes between the outcome and its actual enforcement. The absorptive capacity of the Southern country to exploit technology transfer plays a key role in the negotiated level of IPRs and its post-treaty enforcement. The optimal level of IPR protection relates positively to absorptive capacity. This provides a rationale for the longer time-frame provided to least developed countries in Article 66 of TRIPS to implement its provisions. In addition, monitoring is only effective in preventing contract violation up to a critical level of absorptive capacity. We relate this to the US Trade Representative “Special 301” report, which flags countries that deny adequate IPR protection as “priority watch list”. While disputes with less developed economies are promptly resolved, emerging economies, where most losses from copyright piracy originates from, continue to remain on the list.
    JEL: O34 F13 F53 D78 L10 O33 C70
    Date: 2012–02
  9. By: David Popp; Nidhi Santen; Karen Fisher-Vanden; Mort Webster
    Abstract: R&D is an uncertain activity with highly skewed outcomes. Nonetheless, most recent empirical studies and modeling estimates of the potential of technological change focus on the average returns to research and development (R&D) for a composite technology and contain little or no information about the distribution of returns to R&D—which could be important for capturing the range of costs associated with climate change mitigation policies—by individual technologies. Through an empirical study of patent citation data, this paper adds to the literature on returns to energy R&D by focusing on the behavior of the most successful innovations for six energy technologies, allowing us to determine whether uncertainty or differences in technologies matter most for success. We highlight two key results. First, we compare the results from an aggregate analysis of six energy technologies to technology-by-technology results. Our results show that existing work that assumes diminishing returns but assumes one generic technology is too simplistic and misses important differences between more successful and less successful technologies. Second, we use quantile regression techniques to learn more about patents that have a high positive error term in our regressions – that is, patents that receive many more citations than predicted based on observable characteristics. We find that differences across technologies, rather than differences across quantiles within technologies, are more important. The value of successful technologies persists longer than those of less successful technologies, providing evidence that success is the culmination of several advances building upon one another, rather than resulting from one single breakthrough. Diminishing returns to research efforts appear most problematic during rapid increases of research investment, such as experienced by solar energy in the 1970s.
    JEL: O31 Q4 Q42 Q54 Q55
    Date: 2012–01
  10. By: Gratz, Linda
    Abstract: In this paper, we ask whether courts should continue to rule settlements in the context of pharmaceutical claims per se legal, when these settlements comprise payments from originator to generic companies, potentially delaying generic entry compared to the underlying litigation. Within a theoretical framework we compare consumer welfare under the rule of per se legality with that under alternative standards. We find that the rule of per se legality induces maximal collusion among settling companies. In comparison, the rule of per se illegality entirely prevents collusion and the rule of reason induces limited collusion when antitrust enforcement is subject to error. Contrary to intuition, limited collusion can be welfare enhancing as it increases companies' expected settlement profits and thus fosters generic entry. Generic companies obtain additional incentives to challenge probabilistic patents, which potentially leads to overall increased competition. We further show that generic entry is fostered more effectively by inducing limited collusion than by rewarding first generic entrants with an exclusivity right.
    Keywords: antitrust and intellectual property law; patent settlements; collusion; per se rule; rule of reason; Hatch-Waxman Act
    JEL: I18 K40 L40 O34
    Date: 2012–02
  11. By: Francesco Vona (Observatoire Français des Conjonctures Économiques); Francesco Nicolli (University of Ferrara); Lionel Nesta (Observatoire Français des Conjonctures Économiques)
    Abstract: This paper carries out a comprehensive analysis of renewable energy innovations considering four mechanisms suggested by innovation models: 1. policy-inducement; 2. market structure; 3. demand and social cohesion- mainly proxied by income inequality; 4. characteristics of country knowledge base. For OECD countries and years 1970-2005, we build a unique dataset containing time-varying information on quality-adjusted patent production in renewable energy, the latter being a function of environmental policies, green R&D, entry barriers, knowledge stock, knowledge diversity and income inequality. We develop count data models using the Generalized Method of Moments (GMM) to account for endogeneity of policy support. Our synthetic policy index positively affects innovations especially in countries with deregulated energy markets and low entry barriers. The effect of entry barriers and inequality is negative and of similar magnitude as that of policy. Product market liberalization positively affects green patent generation, especially so when ambitious policies are adopted, when the initial level of public R&D expenditures and when the initial share of distributed energy generation is high. Our results are robust to alternative specifications, to the inclusion of technology-specific effects and to the use of quality-adjusted patents as dependent variables. In the latter case, the estimated effect of lowering entry barriers and of knowledge diversity almost double on citation count relatively to patent count.
    Keywords: renewable energy technology, patent, environmental policies, product market regulation, inequality
    JEL: Q55 Q58 Q42 Q48 O34
    Date: 2012–02
  12. By: Göldner, Moritz; Herstatt, Cornelius; Tietze, Frank; Rehder, Saskia
    Abstract: --
    Date: 2012
  13. By: Benjamin Coriat; Luigi Orsenigo
    Abstract: Pharmaceuticals is one of the few industries in which patents are recognized as being key instruments for privately appropriating the economic benefits of innovation. Competition is largely based on innovation, and basic science is becoming increasingly crucial for the discovery and development of new products. Pharmaceuticals also occupy an extremely socially sensitive sector: large parts of the population increasingly perceive health care as a fundamental human right. For developing countries in particular, health has become a major issue, magnified by the tragedies of pandemics like HIV/AIDS. Controversies about the welfare implications of patents have characterized this industry ever since its inception. But in the last thirty years or so, the establishment of a strong tendency towards an extremely tight IP at the global level regime has made this debate even more heated. In this work, we begin by succinctly reviewing the main problems and the available evidence concerning the relationships between IPRs, innovation and welfare in pharmaceuticals. Next, we summarize the main theoretical arguments in favour and against (strong) IPRs in pharmaceuticals and present the little direct available empirical evidence, concerning respectively innovation and drug prices. Fianlly, we focus on TRIPS and Access to Care in developing countries, with particular reference to the case of HIV (the most emblematic example of the problems generated by enforcement of the TRIPS agreement).
    Keywords: Pharmaceuticals, IPR, right to health care, Pandemics and TRIPS
    Date: 2011–09–14
  14. By: Ghafele, Roya; Engel, Jakob
    Abstract: We assessed to what extent developed country development aid programmes are likely to have interacted with, and potentially contributed to the promotion of country-appropriate sustainable changes in IP strategies and technological capacities over the period 2005-10. This was done primarily on the basis of an imputed impact assessments of four emerging and transition economies; namely Brazil, India, Poland and Thailand. Through an analysis of various measures of the domestic economic, technological and Intellectual Property context, we studied to what extent the supply of IP-related development aid provided between 2005 and 2010 responded to the likely needs of recipient countries. While the data shows that technical and financial assistance in this area could be of great use, and there is clearly a need for well-targeted IP TA and much scope for useful IP TA interventions, there seemed to only be a partial alignment between country needs and the direction of IP TA. On the whole, most IP-related development aid and technical assistance ended to focus on similar areas in each country, regardless of the development context. In Brazil and India’s case, training on IP administration may have influenced increased efficiency (from a low base) at the INPI and IP India, while the substantial EU support to raise SME IP awareness in Poland is likely to have had some significant impacts. In India, sustained development aid in this area likely influenced legislation on plant variety protection, as did WIPO TA on legislative reforms in Thailand. In all cases, the substantial US (and to a more limited extent EC) focus on development aid directed towards enforcement coincided with improvements in this area, though the political and economic pressures by both providers, and especially the US Section 301 System probably dwarfed the impact of this type of aid. Further, the typology and direction of IP related development aid reflects the comparative advantage of IP TA providers, as well as political and diplomatic interests, trade priorities and colonial ties, among many other things. As such, it is important to understand that IP TA is also highly political – a fact often concealed in the emphasis on its “technical” nature.
    Keywords: Intellectual Property and development; aid and technical assistance technological capacities in Brazil; India; Poland; Thailand; taxonomy of development; funding flows Intellectual Property and development; aid and technical assistance technological capacities in Brazil; India; Poland; Thailand; taxonomy of development; funding flows Intellectual Property and development; aid and technical assistance; technological capacities in Brazil; India; Poland; Thailand; taxonomy of development; funding flows Intellectual Property and development; aid and technical assistance technological capacities in Brazil; India; Poland; Thailand; taxonomy of development; funding flows
    JEL: O1 O34 F59
    Date: 2011–04–28
  15. By: Benjamin Coriat
    Abstract: Drawing on the works of Ostrom, the paper seeks to establish the bases on which the "traditional" commons (TC) and the "knowledge" commons (KC) can be compared and differentiated. Three criteria are proposed: the nature of the goods or systems of resources, the property regimes and the modes of governance. On this basis, the two large families of commons (traditional/informational) are distinguished as follows: - Nature of the goods. While TC are composed of tangible and rival goods, KC are composed of non-rival goods; - Property regimes. The essential difference (between TC and KC) lies in the fact that in TC, the basic right given the to "authorized users" is designed to guarantee the long-term reproduction of the resource, whereas in KC, beside the right to withdraw resources from the CPR, another and complementary right is defined ; namely a right of addition. In KC, the authorized users are allowed and encouraged to contribute new information or knowledge to the pool. It is often for this very reason that the pool has been created. - Mode of governance. Whereas TC are oriented towards the reproduction of the shared resources, KC are oriented towards their continual enrichment (databases, open source software, wikis, etc.). Finally, if TC are above all organizations aiming at the orderly exploitation and long-term conservation of resources, many KCs and the most prominent one (FLOSS, wikis, ..) are conceived primarily as tools for the growth and enrichment of the pool of resources through cooperative procedures aiming at promoting modes of production of innovation based on information sharing.
    Keywords: IPRs, Property regimes, Commons, Public Domain, Public goods
    Date: 2011–07–13

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