nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2013‒07‒15
twelve papers chosen by
Giovanni Ramello
Universita' Amedeo Avogadro

  1. Patent Infringement, Technology Selection, and Non-Practicing Entities (Japanese) By OHNO Yuka
  2. Patent protection under endogenous product differentiation By Arijit Mukherjee
  3. The Technological Specialization of Countries: An Analysis of Patent Data By Lucio Picci; Luca Savorelli
  4. R&D, Within and Between Patent Competition in the Pharmaceutical Industry By Magazzini Laura; Fabio Pammolli
  5. Patent data appendix for quid pro quo: Technology capital transfers for market access in China By Thomas J. Holmes; Ellen R. McGrattan; Edward C. Prescott
  6. Innovation in the Host Country and the Structure of Foreign Direct Investment: Evidence from Japanese multinationals By JINJI Naoto; Xingyuan ZHANG
  7. Competition and the Efficiency of Markets for Technology By Allain, Marie-Laure; Henry, Emeric; Kyle, Margaret
  8. Optimal R&D Investments in Plant Breeding with IPRs and Flexibility between Hybrid and Herbicide Tolerance Trait Development By Brewin, Derek G.; Arzandeh, Mehdi
  9. Spillover and Competitive Effects of Advertising in the Carbonated Soft Drink Market By Rigoberto A. Lopez; Yizao Liu; Chen Zhu
  10. Branding Stockholm By Paschou, Eleni; Metaxas, Theodore
  11. Corporate Reputation and Social Media: A Game Theory Approach By Thierry Warin; Nathalie de Marcellis-Warin; William Sanger; Bertrand Nembot; Venus Hosseinali Mirza
  12. Willingness to Pay for Private Labels, National Brands, and Local Designations at the Retail Level By Bosworth, Ryan C.; Bailey, DeeVon; Curtis, Kynda R.

  1. By: OHNO Yuka
    Abstract: I construct a simple thee-period game to investigate the effects of patent infringement litigations and patent ownership by non-practicing entities (NPEs) on technology selection for a new product. A firm may choose to embed fewer high-tech features into the new product in order to avoid or delay potential patent infringement lawsuits. NPEs tend to bring patent infringement lawsuits later than practicing entities (PE). In contrast to commonly believed, the technology-adopting firm may be willing to incorporate more technology features when the potentially-infringing patents are owned by an NPE than by a PE.
    Date: 2013–07
  2. By: Arijit Mukherjee (School of Business and Economics, Loughborough University, UK)
    Abstract: It is generally believed that a weak patent protection makes the consumers and the society better off compared to a strong patent protection by increasing the intensity of competition if the weak patent protection does not affect innovation. We show that this conclusion may not hold if the innovator can take other non-production strategies, such as product differentiation, to reduce the intensity of product-market competition. A weak patent protection may reduce consumer surplus and social welfare by inducing product differentiation by the innovator. We show that the type of product-market competition and the market demand function play important roles in this respect. Hence, there can be an argument for a strong patent protection even if it does not affect innovation.
    Keywords: Patent protection; Product differentiation; Welfare
    JEL: D21 D43 L13 O34
    Date: 2013–07
  3. By: Lucio Picci (University of Bologna); Luca Savorelli (University of St. Andrews)
    Abstract: New methods of analysis of patent statistics allow assessing country profiles of technological specialization for the period 1990-2006. We witness a modest decrease in levels of specialization, which we show to be negatively influenced by country size and degree of internationalization of inventive activities.
    Keywords: Patents; Internationalization; Specialization; Technological Sectors.
    JEL: O31 O34
    Date: 2013–01–07
  4. By: Magazzini Laura (Department of Economics, University of Verona); Fabio Pammolli (IMT Lucca Institute for Advanced Studies Author-Name: Massimo Riccaboni; IMT Lucca Institute for Advanced Studies)
    Abstract: : We analyse the consequences of the increasing complexity of R&D on within- and between-patent competition in the pharmaceutical industry. The intensity of competition is measured by jointly considering the timing from market launch to patent expiry, the strength of between-patent competition as well as competition introduced by generic producers. A simple model is proposed that predicts the shrinking of product lifetimes in the presence of correlated parallel R&D projects and market portfolios. The model is tested using data on pharmaceutical products sold in Europe and in the US. Based on our model we are able to estimate the impact of R&D complexity and relatedness among R&D portfolios on the value of innovative drugs.
    Keywords: Patent value, innovation, R&D competition, Pharmaceutical industry.
    JEL: D23 D83 O34 O31 L13
    Date: 2013–07
  5. By: Thomas J. Holmes; Ellen R. McGrattan; Edward C. Prescott
    Abstract: Despite the recent rapid development and greater openness of China’s economy, FDI flows between China and technologically advanced countries are relatively small in both directions. We assess global capital flows in light of China’s quid pro quo policy of exchanging market access for transfers of technology capital—accumulated know-how such as research and development (R&D) that can be used in multiple production locations. We first provide empirical evidence of this policy and then incorporate it into a multicountry dynamic general equilibrium model. This extension leads to a significantly better fit of the model to data. We also find large welfare gains for China—and welfare losses for its FDI partners—from quid pro quo.
    Keywords: China
    Date: 2013
  6. By: JINJI Naoto; Xingyuan ZHANG
    Abstract: In this study, we investigate how the innovative performance of local firms in host countries affects the structure of foreign direct investment (FDI) by multinational enterprises (MNEs) using Japanese firm-level data and patent application data for host countries of Japanese FDI at the United States Patent and Trademark Office for the period from 1995 to 2006. The structure of FDI is measured by the shares of local transactions and transactions with the source country and a third country by foreign affiliates of Japanese MNEs. Our estimation results imply that innovation by local firms in the same and related industries in host countries in Asia and Europe strengthens forward and backward linkages. We also find that innovation in the host country encourages transactions with the source country when the former is technologically advanced. Finally, our findings suggest that, in Asia, the innovative performance of local firms contributes to the development of regional production networks.
    Date: 2013–06
  7. By: Allain, Marie-Laure; Henry, Emeric; Kyle, Margaret
    Abstract: The sale of R&D projects through licensing facilitates the division of labor between research and development activities. This vertical specialization can improve the overall efficiency of the innovative process. However, these gains depend on the timing of the sale: the buyer of an R&D project should assume development at the stage at which he has an efficiency advantage. We show that in an environment where the seller is overconfident about the value of the project, she may delay the sale to the more efficient firm in order to provide verifiable information about its quality, though this delay implies higher total development costs for the project. We obtain a condition for the equilibrium timing of licensing and examine how factors such as the intensity of competition between potential buyers influence it. We show that a wide array of different explanations, based on differences in information, beliefs or risk profiles, lead to the same qualitative results. We present empirical evidence from pharmaceutical licensing contracts that is consistent with our theoretical predictions.
    Date: 2013–07
  8. By: Brewin, Derek G.; Arzandeh, Mehdi
    Keywords: Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies,
    Date: 2013–06
  9. By: Rigoberto A. Lopez (University of Connecticut); Yizao Liu (University of Connecticut); Chen Zhu (University of Connecticut)
    Abstract: This paper examines the spillover effects of television advertising on brand-level consumer demand for carbonated soft drinks (CSDs) and the competition consequences for manufacturers’ and private label CSDs. Using a random coefficients logit model (BLP) with household purchasing and advertising viewing data from five U.S. cities, we find that although brand advertising is important in increasing demand as previous work confirms, company advertising spillovers are nearly as important. Not surprisingly, advertising by competitors undermines demand for a particular manufacturer’s CSD brand but, surprisingly, there are positive spillover effects on the demand for private label brands. Further results show that eliminating all television advertising for CSDs would lower both brand and aggregate market shares (including private labels) as consumers migrate to other beverages. However, the dominant strategy is for leading companies to advertise to avoid losing revenues when competitors advertise or to increase revenues when they do not.
    Keywords: advertising, demand, competition, consumer behavior, sodas, carbonated soft drinks
    JEL: D12 L66 Q18 I18
    Date: 2013–02
  10. By: Paschou, Eleni; Metaxas, Theodore
    Abstract: City branding is a relatively new topic gaining extreme interest and a promising and practical field of marketing. Due to global competition, even more regions and cities around the world, are seeking solutions in place branding’s methods and practices, which now consists a main urban development tool. Having a significant amount of information, the study will focus on the city of Stockholm. Being capital of Sweden and city with strong economic and political background, the case study will focus on the factors which contribute to an attractive external image. Studying its economic structure, business environment, educational system, how residents and foreigners see and respect the city, as well as the existing city branding methods, we will try to identify the way in which city will be attractive in tourists, investors and residents, as well as whether the city manages to fulfill its objectives about Vision 2030, targeting on a “World-Class city”.
    Keywords: City Branding, Place Marketing, Stockholm, Vision 2030, World-Class city, Brand Name
    JEL: R58 R59
    Date: 2013–06
  11. By: Thierry Warin; Nathalie de Marcellis-Warin; William Sanger; Bertrand Nembot; Venus Hosseinali Mirza
    Abstract: Corporate reputation is more and more the most valuable asset for a firm. In this day and age, corporate reputation, although an intangible asset, is and will grow as the most essential asset to publicize and also protect. Social media are a formidable tool to publicize a firm's brand and improve its reputation. However, it can also be deadly. Associated with social media comes the "buzz", i.e. the means to spread at an unprecedented speed and scale any information, being true or false. In this paper, our aim is to propose a Game Theory approach with both a finite and an infinite horizon. The model presented here helps us evaluate the impact of social media on a firm's reputation. It also highlights the important parameters of a firm's reputation in this new digital era <P>
    Keywords: social media, social economics, brand tribalism, corporate reputation,
    JEL: L14 M14 M21 M31
    Date: 2013–07–01
  12. By: Bosworth, Ryan C.; Bailey, DeeVon; Curtis, Kynda R.
    Abstract: A shopper survey was conducted to determine willingness to pay for ice cream with different labels. A statistical analysis was conducted using stated choices by respondents. The randomized choices were 1) a local brand with or without an indication it had a Utah’s Own designation, 2) a local brand with and without a locally-produced designation, 3) a private label product , and 4) a national brand product. The results suggested that brands affect willingness to pay for ice cream. However, shoppers were willing to pay a significant positive amount more for ice cream with the local designations.
    Keywords: choice experiments, state-sponsored food designations, ice cream, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Public Economics, Q1, Q13,
    Date: 2013–02

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