nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2013‒04‒27
twelve papers chosen by
Giovanni Ramello
Universita' Amedeo Avogadro

  1. Fast-tracking “green” patent applications: an empirical analysis By Antoine Dechezleprêtre
  2. Patent Trading Flows of Small and Large Firms By Nicolas Figueroa; Carlos J. Serrano
  3. On the Origins of the Worldwide Surge in Patenting: An Industry Perspective on the R&D-patent Relationship By Jérôme Danguy; Gaétan de Rassenfosse; Bruno Van Pottelsberghe
  4. The impact of patent litigation on shareholder value in the IT industry By Nam, Sangjun; Nam, Changi
  5. Signaling and the Ownership of Academic Patents By Nicolas CARAYOL; Valerio STERZI
  6. Related Variety, Unrelated Variety and Technological Breakthroughs: an analysis of U.S. state-level patenting By Carolina Castaldi; Koen Frenken; Bart Los
  7. The Shapley value as a guide to FRAND licensing agreements. By Pierre Dehez; Sophie Poukens
  8. Just-in-time inventions and the development of standards: How firms use opportunistic strategies to obtain standard-essential patents (SEPs) By Byeongwoo Kang; Rudi Bekkers
  9. Endogenous growth and intellectual property rights: a North-South modelling proposal By Mónica L. Azevedo; Óscar Afonso; Sandra T. Silva
  10. Institutional Complementarities and Property Rights-Technology Equilibria under Knowledge Intensive Technology By Erkan Gurpinar
  11. Optimal patent length and patent breadth in an R&D driven market with evolving consumer preferences: An evolutionary multi-agent based modelling approach By Cevikarslan, Salih
  12. Patterns of Innovation in SaaS Networks: Trend Analysis of Node Centralities By Kibae Kim; Wool-Rim Lee; Jorn Altmann

  1. By: Antoine Dechezleprêtre
    Abstract: This paper presents the first empirical analysis of programmes to fast-track ‘green’ patent applications in place in seven Intellectual Property offices around the world. We find that only a small share of green patent applications (between 1% and 20% depending on the patent office) request accelerated examination, suggesting that patent applicants have a strong incentive to keep their patent applications in the examination process for as long as possible. Fast-tracking programmes reduce the examination process by several years compared to patents going through normal examination procedure and have seemingly accelerated the diffusion of technological knowledge in green technologies. In addition, we find that applicants require accelerated examination for patents of relatively higher value and that fast-tracking programmes seem to be particularly appealing to start-up companies in the green technology sector that are currently raising capital but still generate small revenue.
    Date: 2013–02
  2. By: Nicolas Figueroa; Carlos J. Serrano
    Abstract: This article presents the results of an analysis of the patent trading flows of small and large firms and the determinants of these firm's patent sale and acquisition decisions. We also examine whether these transactions lead to an excessive concentration of patent rights. We show that small firms disproportionately sell and acquire more patents than large firms, and find no evidence that patent trading brings about a significant concentration of patent rights in the hands of large firms. We find that the match between new patented innovations and the original inventor's patent portfolio plays an important role in how successful firms are at generating value from their patents, and in the decision to sell a patent. And among the traded patents, we show that patent acquisitions respond to complementarities between the acquired patented innovation and the buyer's technological capabilities to adopt it. Our empirical analysis uses a new, comprehensive data set that matches information on patent trades and the identity of patent owners over a patent's lifetime.
    JEL: L22 L24 O32 O34
    Date: 2013–04
  3. By: Jérôme Danguy; Gaétan de Rassenfosse; Bruno Van Pottelsberghe
    Abstract: This paper decomposes the R&D-patent relationship at the industry level to shed light on thesources of the worldwide surge in patent applications. The empirical analysis is based on aunique dataset that includes 5 patent indicators computed for 18 industries in 19 countriescovering the period from 1987 to 2005. The analysis shows that variations in patentapplications reflect not only variations in research productivity but also variations in theappropriability and filing strategies adopted by firms. The results also suggest that the patentexplosion observed in several patent offices can be attributed to the greater globalization ofintellectual property rights rather than to a surge in research productivity.
    Keywords: appropriability; complexity; patent explosion; propensity to patent; research productivity; strategic patenting
    JEL: O30 O34 O38
    Date: 2013–04
  4. By: Nam, Sangjun; Nam, Changi
    Abstract: In recent years, patent lawsuits in the IT industry have become a sensitive issue. While numerous studies have investigated the wealth effect of patent and corporate litigation, few studies have examined the current patent litigation in the IT industry. This paper investigates the wealth effect of patent lawsuits using an event study method. This paper hypothesizes that a firm which initiates a lawsuit experiences more of a positive return than a rival firm when the patent lawsuit filing is announced, as a firm will initiate a lawsuit when they are convinced that they have a vantage position in the patent lawsuit. The empirical results show that a firm which has a vantage position in a patent lawsuit experiences a positive stock price return when they sue a rival firm for patent infringement and that a firm which does not have a vantage position in a patent lawsuit experiences a negative stock price return when they are sued by a rival firm. The empirical results support that a vantage position in patent litigation is the one of the key factors to explain the wealth effect of patent litigation. This paper suggests that action to increase patent competency to reach a vantage position in a patent war is one of the ways to increase shareholder value. --
    Keywords: Patent litigation,Event study,Intellectual property,Litigation cost
    Date: 2012
  5. By: Nicolas CARAYOL; Valerio STERZI
    Abstract: Although in most countries, professors are legally obligated to disclose their inventions to their university\'s technology transfer office, the latter often does not have the real authority to enforce this rule. We here introduce a model that endogenizes a professor\'s decision of a form of transfer for her idea. If she does not disclose the idea to the transfer office, she still faces, on her own, both the difficulty of identifying a good match for her technology with a company and the incomplete information of the company on the quality of her idea. She can, however, signal that quality to the company at some cost which is decreasing with quality. We find four types of pure strategy equilibria of this signaling game. Taking these four types of equilibria into account, the model predicts that the company ownership of academic patents are associated with higher patent quality, greater inventor experience in technology transfer, and lower technology transfer office experience. We estimate the model and confirm its predictions on an original sample of 1,260 patent-professor pairs built on UK data. Specific attention is paid to the control of various forms of potential reverse causality of the type of patent applicant on patent quality.
    Keywords: signaling game, academic patents, technology transfer.
    JEL: O31 O34
    Date: 2013
  6. By: Carolina Castaldi; Koen Frenken; Bart Los
    Abstract: We investigate how variety affects the innovation output of a region. Borrowing arguments from theories of recombinant innovation, we expect that related variety will enhance innovation as related technologies are more easily recombined into a new technology. However, we also expect that unrelated variety enhances technological breakthroughs, since radical innovation often stems from connecting previously unrelated technologies opening up whole new functionalities and applications. Using patent data for US states in the period 1977-1999 and associated citation data, we find evidence for both hypotheses. Our study thus sheds a new and critical light on the related-variety hypothesis in economic geography.
    Keywords: recombinant innovation, regional innovation, superstar patents, technological variety, evolutionary economic geography
    JEL: O31 R11
    Date: 2013–02
  7. By: Pierre Dehez; Sophie Poukens
    Abstract: We consider the problem of specifying Fair, Reasonable And Non-Discriminatory agreements faced by standard-setting organizations. Along with Layne-Farrar, Padilla and Schmalensee (2007), we model the problem as a cooperative game with transferable utility, allowing for patents to be weak in the sense that they have substitutes. Assuming that a value has been assigned to weak patents, we obtain a formula for the Shapley value that gives an insight into what FRAND agreements should look like.
    Keywords: patent licensing, Shapley value, core.
    Date: 2013
  8. By: Byeongwoo Kang; Rudi Bekkers
    Abstract: Recent years have seen large-scale litigation of standard-essential patents between companies like Apple, Samsung, Google, Motorola and Microsoft. Such patents are particular because they are, by definition, indispensable to any company wishing to implement a technical standard. Firms that do not own such patents are prepared to spend billions of dollars purchasing them. It is an interesting question how firms obtain such patents in the first place, and to what degree this depends on those firms’ strategies at the time of standardization. This paper presents an in-depth investigation on the standardization process of the successful W CDMA and LTE standards for mobile telecommunications. We studied the first 77 meetings where these standards took shape, covering a period of over 12 years, and identified the patenting behavior of each of the 939 individual participants attending these meetings, as well as the patenting behavior by non-participants, together resulting in over 14,000 patents for this technology. Our data reveals a strong relationship between patent timing and the occurrence of meetings. We observed a remarkable phenomenon that we call ‘just-in-time-inventions’: the patent intensity of about-to-become claimed essential patents is much higher during or just before these meetings than in other periods. At the same time, they are of considerably lower technical value (‘merit’). This suggests that the just-in-time inventions are only beneficial to their owners, whereas for the public they merely invoke unnecessary costs. Finally, we observed that the phenomenon of just-in-time inventions is highly concentrated among specific types of firms, above all vertically integrated ones, and the incumbent champions of the previous technology standard. We believe our findings have several implications for standard setting organizations and policy makers alike.
    Keywords: essential patents, SEP
    Date: 2013–02
  9. By: Mónica L. Azevedo (Faculdade de Economia, Universidade do Porto); Óscar Afonso (CEF.UP, Faculdade de Economia, Universidade do Porto); Sandra T. Silva (CEF.UP, Faculdade de Economia, Universidade do Porto)
    Abstract: In what form should the Intellectual Property Rights (IPR) be treated in an endogenous growth model? What are the effects of introducing IPR into a North-South endogenous growth model? In this paper, we develop a general equilibrium endogenous growth model that emphasizes the IPR enforcement effects on growth, in a scenario of North-South technological knowledge diffusion. The economy consists of three sectors, and firms are engaged in step-by-step innovation. In line with the literature, we introduce an IPR parameter that makes imitation more difficult. We find that, in steady state, the increases in IPR protection result in decreases in the growth rate. This result is in line with the literature, which argues that the enforcement of IPR does not always have a positive effect on economic growth and highlights that there is much more work to be done in this field of study, given that the existing results are not consensual. To sum up, we present some suggestions for future research which can help to clarify the relationship between IPR and endogenous growth.
    Keywords: Intellectual Property Rights (IPR), economic growth, North-South model
    JEL: O33 O34 O41
    Date: 2013–04
  10. By: Erkan Gurpinar
    Abstract: The unprecedented development of intellectual property rights (both in scale and scope) has been one of the most important factors in the transformation of the world economy over the last three decades. We argue that, at least in part, economic importance of knowledge has brought an overreaching enclosure movement on it. IPRs regime protecting the knowledge base of firms deprives knowledge workers of owning the intellectual assets developed in the production process. This development, in turn, (a) has damaging consequences on the knowledge workers’ skills; thereby (b) the rise of a virtuous cycle between nonexclusive property rights and workers’ skills is prevented.
    Keywords: Intellectual property rights, knowledge intensive technology, institutional complementarities
    JEL: K11 L23 O34
    Date: 2013–04
  11. By: Cevikarslan, Salih (UNU-MERIT, and SBE, Maastricht University)
    Abstract: The aims of this paper are twofold. The first is to analyse the interaction between research and development (R&D) activities of firms and heterogeneous consumer preferences in structuring the evolution of an industry. The second is to explore the effects of patent life and patent breadth on market outcomes. To answer these research questions, an evolutionary, multi-agent based, sector-level cumulative innovation model is designed. The model addresses supply and demand sides of the market simultaneously with the co-evolution of heterogeneous consumer preferences, heterogeneous firm knowledge bases and technology levels at the micro level. In line with the evolutionary modelling tradition, we have a search algorithm-innovation and imitation of products by firms - a selection of algorithm-revealed preferences of the consumers - and a population of objects in which variation is expressed and on which selection operates: namely, firms (Windrum, 2004). Firms compete on quality and price of their products in an oligopolistic market whereas consumers, constrained by their computational limits, act to maximize their utility with their product choices in a boundedly rational way. There is continuous firm entry and exit depending on the competitive performance of the firms.
    Keywords: Patents, industrial dynamics, evolutionary economics, agent-based modelling
    JEL: B52 L11 O34
    Date: 2013
  12. By: Kibae Kim (Technology Management, Economics, and Policy Program, College of Engineering, Seoul National University); Wool-Rim Lee (Technology Management, Economics, and Policy Program, College of Engineering, Seoul National University); Jorn Altmann (Technology Management, Economics, and Policy Program, College of Engineering, Seoul National University)
    Abstract: As software vendors provide their software as a service (SaaS) and allow users to access the software functions via open interfaces, the innovation style has shifted from local innovation of a software user, to collective innovation of an entire system of users and software. This new innovation trend directs the innovation research to the structural and evolutionary patterns of SaaS networks, in which a node represents a software service and a link the combined use of two software services for provisioning a new service. However, prior research concentrates only on the static properties of network structure and the position of nodes in the network, but misses the dynamics in the evolution context. In this paper, we close this gap by investigating the trend of centralities of five representative software services in a SaaS network. The data has been obtained from Our results suggest that each software service of a SaaS network follows the typical life cycle from growth to decline. In addition to this, the innovation trend shifts from image services to social networking services, involving a transition of network structure. Our results also show the necessity of innovation studies that investigate the changing patterns of evolving innovation networks.
    Keywords: Open Innovation, Centralities, Composite Services, Software-as-a-Service.
    JEL: D85 L86 O33
    Date: 2013–01

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