nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2014‒02‒02
nine papers chosen by
Giovanni Ramello
Universita' del Piemonte Orientale Amedeo Avogadro

  1. Taste for Exclusivity and Intellectual Property Rights By Kiedaisch, Christian; Grafenhofer, Dominik
  2. The criteria of copyrightability used in Russian judicial practice By Andrey V. Kashanin
  3. Get Pennies from Many or a Dollar from One? Multiple contracting in markets for technology By Jianwei DANG; MOTOHASHI Kazuyuki
  4. Cumulative Innovation, Growth and Welfare-Improving Patent Policy By Edwin Lai
  5. Industry Localization, Distance Decay, and Knowledge Spillovers: Following the Patent Paper Trail By Octávio Figueiredo; Paulo Guimarães; Douglas Woodward
  6. Compulsory Licensing, Innovation and Welfare By Seifert, Jacob
  7. Publisher's Announcements and Piracy-Monitoring Devices in Software Adoption By Eric Darmon; Alexandra Rufini; Dominique Torre
  8. Graduated Response Policy and the Behavior of Digital Pirates: Evidence from the French Three-strike (Hadopi) Law By Michael Arnold; Éric Darmon; Sylvain Dejean; Thierry Pénard
  9. Piracy and Movie Revenues: Evidence from Megaupload By Peukert, Christian; Claussen, Jörg; Kretschmer, Tobias

  1. By: Kiedaisch, Christian; Grafenhofer, Dominik
    Abstract: This article analyzes the effects of intellectual property rights protection on innovation in a quality-ladder model in which part of the consumers value being the exclusive consumers of the newest generation of a good. In the case of a monopoly innovator, we show that reducing IP protection can increase the average innovation rate by regularly destroying exclusivity and thereby creating incentives to invent new exclusive goods. In the case where R&D is undertaken by entrants, the innovation rate, however, increases in the strength of IP protection for most market structures. In each case, we derive the welfare-maximizing strength of IP protection. --
    JEL: O34 O31 L40
    Date: 2013
  2. By: Andrey V. Kashanin (National Research University Higher School of Economics)
    Abstract: This article addresses the problem of identifying criteria for copyrightability and non-copyrightability in the Russian legal system, especially in judicial practice. An analysis of court rulings issued over the past few years warrant the conclusion that there is a trend towards setting looser standards of originality and creativity. The article also describes a trend in Russian judicial practice to grant copyright protection to works of low authorship and goes into problems and contradictions that this entails. It compares principles that evolved in Russian law with similar principles used abroad, mainly in Germany.
    Keywords: copyright, intellectual property, intellectual rights, personal non-property rights, exclusive rights, copyrightable work, copyrightability, works of low authorship, originality, creativity
    JEL: O34
    Date: 2014
  3. By: Jianwei DANG; MOTOHASHI Kazuyuki
    Abstract: Using survey data of licensing activities of Japanese firms, this paper studies the interaction between patenting and multiple contracting and their effects on license revenues for large and small licensors. We find that small firms are more likely to license their technologies to multiple licensees and receive more revenue from multiple contracting, confirming a theory that multiple contracting makes small firms less vulnerable in forming profit-sharing alliances with downstream technology users. We also find that patented technologies are less likely to be licensed to multiple licensees. However, patenting itself has no significant effect on increasing license revenues. We provide implication for small firms which want to appropriate from licensing out their technology: it is more difficult to get one dollar from one licensee than it is to accrue pennies from many to make a fortune, even under patent protection. Our result suggests a necessity in providing platforms for active interactions between small innovators and downstream technology users.
    Date: 2014–01
  4. By: Edwin Lai (Hong Kong University of Science and Tech)
    Abstract: We construct a tractable general equilibrium model of cumulative innovation and growth, in which new ideas strictly improve upon frontier technologies, and productivity improvements are drawn in a stochastic manner. The presence of positive knowledge spillovers implies that the decentralized equilibrium features an allocation of labor to R&D activity that is strictly lower than the social planner's benchmark, which suggests a role for patent policy. We focus on a "non-infringing inventive step" requirement, which stipulates the minimum improvement to the best patented technology that a new idea needs to make for it to be patentable and non-infringing. We establish that there exists a finite required inventive step that maximizes the rate of innovation, as well as a separate optimal required inventive step that maximizes welfare, with the former being strictly greater than the latter. These conclusions are robust to allowing for the availability of an additional instrument in the form of patent length policy.
    Date: 2013
  5. By: Octávio Figueiredo (Universidade do Porto); Paulo Guimarães (American University of Sharjah); Douglas Woodward (University of South Carolina)
    Abstract: This paper investigates the hypothesis that knowledge spillovers increase where industries are localized. At the same time, we take a fresh look at the role of distance in knowledge diffusion. Our unique database combines U.S. county-level patent citation data with county-level establishment and employment data. Relying on a cited-citing gravity equation with high-dimensional fixed effects that control for multiple sources of observed and non-observed heterogeneity, we implement a Poisson pseudo-maximum-likelihood estimator. Our results confirm the negative role of distance uncovered in Jaffe, Trajtenberg & Henderson's (1993) pioneering work. We also find that knowledge spillovers correlate positively with industry localization and that the agglomeration of an industry can offset the effect of distance. Our approach to estimate the Poisson regression with two high-dimensional fixed effects may prove equally useful in applications to a variety of other problems in economics.
    Keywords: Knowledge Spillovers, Agglomeration, Gravity Equation, High-Dimensional Fixed Effects, Poisson Regression.
    JEL: R12 R39 C13 C21
    Date: 2014–01
  6. By: Seifert, Jacob
    Abstract: This paper develops a three-stage model of innovation, fixed-fee licensing and production to evaluate the welfare effects of compulsory licensing, taking into account both static (information sharing) and dynamic (innovation incentive) effects. Compulsory licensing is shown to have an unambiguously positive impact on consumer surplus. Compulsory licensing has an ambiguous effect on total welfare, but it is more likely to increase total welfare in industries which are naturally less competitive. Furthermore, compulsory licensing can be an effective policy to safeguard the competitive process per se. These welfare results hold independently of whether R&D incentives in the absence of licensing favour the leading firm ('persistent dominance') or predict that the follower will overtake the incumbent ('action-reaction'). --
    JEL: L13 O31 O34
    Date: 2013
  7. By: Eric Darmon (CREM - Centre de Recherche en Economie et Management - CNRS : UMR6211 - Université de Rennes 1 - Université de Caen Basse-Normandie); Alexandra Rufini (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis [UNS]); Dominique Torre (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis [UNS])
    Abstract: In this paper, we investigate the distribution strategy of a software publisher. The user adoption context is characterized by uncertainty about quality (experience good) and heterogeneous piracy costs. Users can purchase or get unauthorized/illegal copies (digital piracy) of the software during two periods (or not adopt at all). Between these two periods, users can acquire information through word-of-mouth. To maximize profit, the publisher needs to decide about price, quality and level of monitoring of piracy. We show that the software publisher can profit from accommodation a certain level of piracy of the product. We add to the literature by explicitly considering the opportunity for the publisher to cheat about future price and monitoring levels (misleading announcements). This strategy that is falsely permissive towards piracy, can sometimes appear more profitable. However, when the degree of sophistication of user expectations about the publisher's strategy increases, only a strategy that is permissive (with respect to piracy) with non misleading announcements remains robust.
    Keywords: software distribution strategy ; piracy ; experience good ; misleading announcements
    Date: 2014–01–16
  8. By: Michael Arnold (Department of Economics, University of Delaware, US); Éric Darmon (CREM UMR CNRS 6211, University of Rennes 1, France); Sylvain Dejean (LR-MOS, University of La Rochelle, France); Thierry Pénard (CREM UMR CNRS 6211, University of Rennes 1 & University of Delaware)
    Abstract: Most developed countries have tried to restrain digital piracy by strengthening laws against copyright infringement. In 2009, France implemented the Hadopi law. Under this law individuals receive a warning the first two times they are detected illegally sharing content through peer to peer (P2P) networks. Legal action is only taken when a third violation is detected. We analyze the impact of this law on individual behavior. Our theoretical model of illegal behavior under a graduated response law predicts that the perceived probability of detection has no impact on the decision to initially engage in digital piracy, but may reduce the intensity of illegal file sharing by those who do pirate. We test the theory using survey data from French Internet users. Our econometric results indicate that the law has no substantial deterrent eect. In addition, we find evidence that individuals who are better informed about the law and piracy alternatives substitute away from monitored P2P networks and illegally access content through unmonitored channels.
    Date: 2014–01
  9. By: Peukert, Christian; Claussen, Jörg; Kretschmer, Tobias
    Abstract: In this paper we make use of a quasi-experiment in the market for illegal downloading to study movie box office revenues. Exogenous variation comes from the unexpected shutdown of the popular file hosting platform on January 19, 2012. The estimation strategy is based on a quasi difference-in-differences approach. We compare box office revenues before and after the shutdown to a matched control group of movies unaffected by the shutdown. We find that the shutdown had a negative, yet insignificant effect on box office revenues.This counterintuitive result may suggest support for the theoretical perspective of (social) network effects where file-sharing acts as a mechanism to spread information about a good from consumers with zero or low willingness to pay to users with high willingness to pay. --
    JEL: L50 L82 D83
    Date: 2013

This nep-ipr issue is ©2014 by Giovanni Ramello. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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