nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2014‒11‒22
seven papers chosen by
Giovanni Ramello
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. The Effects of Smoothing of the Renewal Fees on Patent Option Value(in Japanese) By Setsuo YAMADA
  2. Is Co-Invention Expediting Technological Catch Up? A Study of Collaboration between Emerging Country Firms and EU inventors By Giuliani , Elisa; Martinelli , Arianna; Rabellotti , Roberta
  3. Trademarks Squatters: Evidence from Chile By Carsten Fink; Christian Helmers; Carlos Ponce
  4. Standards, IPR and digital TV convergence: theories and empirical evidence By Matteucci, Nicola
  5. Strategic outsourcing with technology transfer under price competition By Kabiraj, Tarun; Sinha, Uday Bhanu
  6. Incentive Design for Inventors: Theory and empirical evidence (Japanese) By NAGAOKA Sadao; OWAN Hideo; ONISHI Koichiro
  7. Consumer Policy Guidance on Intangible Digital Content Products By OECD

  1. By: Setsuo YAMADA
    Abstract: This paper aims to construct a patent option model suitable for the Japanese patent system, and then to explore empirically the economic effects caused by the significant revision of the Japanese patent maintenance fees in 1998. The revision of patent law in 1998 fundamentally changed the fee schedule so that payments peaked in ten to twelve year after patent registration, followed by a level off, which resulted in major fee reductions. This was a very bold change in the patent fee structure compared to historical structures of patent fee maintenance in Japan and other major countries. The leveling-off of patent maintenance fees was aimed to reduce cost burden on patent owners and to give incentives to their R&D activities. In addition, it served to contain the special patent account's rising surplus. The simulation results based on the patent option model show that the introduction of the leveling-off maintenance fees enables the patent to hold the patent term longer, while minimizing the influence on the patent option value. However, it is confirmed to have a relatively substantial effect on reducing patent fee revenues.
    Date: 2013–01
  2. By: Giuliani , Elisa (Dept. Economics & Management, University of Pisa); Martinelli , Arianna (LEM – Scuola Superiore Sant’Anna); Rabellotti , Roberta (Department of Political and Social Sciences, Università di Pavia)
    Abstract: Firms from emerging countries such as Brazil, India, and China (BIC) are going global, and Europe is attracting around one-third of their direct outward investments. Growing internationalization constitutes an opportunity for technological catch up. In this paper we analyze BIC firms’ cross-border inventions with European Union (EU-27) actors, during the period 1990-2012. Our results suggest that cross-border inventions represent an opportunity for BIC firms to accumulate technological capabilities, access frontier knowledge, and appropriate the property rights of co-inventions. This paper contributes to the understanding of the catching up process by emerging country firms, and offers some policy recommendations.
    Keywords: emerging countries; multinationals; technological catch up; patents; European Union
    JEL: O10 O30 O34
    Date: 2014–11–05
  3. By: Carsten Fink (Economics and Statistics Division, World Intellectual Property Organization, Geneva, Switzerland.); Christian Helmers (Santa Clara University, United States of America); Carlos Ponce (ILADES-Universidad Alberto Hurtado, Santiago de Chile, Chile)
    Abstract: This paper explores the phenomenon of “trademark squatting” – a situation in which someone other than the original brand owner obtains a trademark on a brand. We develop a model that shows how squatting results from market uncertainty that leads brand owners to rationally forgo registering trademarks, creating opportunities for squatting. We create an algorithm to identify squatters in the Chilean trademark register and show empirically that squatting is a persistent and systematic phenomenon. Using data on trademark oppositions, we find that squatting leads brand owners that have been exposed to squatting to “over-protect” their brands by registering disproportionately many trademarks and covering classes other than those directly related to their products and services. Trademark squatting, therefore, creates a strategic, albeit excessive, response by brand owners which inflates trademark filings.
    Keywords: trademark, squatter, strategic behavior, Chile.
    JEL: D22 M30 K11 O34
    Date: 2014–09
  4. By: Matteucci, Nicola
    Abstract: Media convergence presents a few noticeable dimensions, and requests an interdisciplinary research approach. We conduct a long-run analysis of the main initiatives of technological standardization carried out in the realm of “traditional†(cable, satellite and terrestrial) digital TV, focusing on Europe, to assess the technological determinants of its apparent trends to convergence. This analysis inevitably calls into question IPR strategies and policies. In particular, we investigate how private incentives and the public agenda for interoperability have shaped the on-going convergence of the TV sector toward an “IP-based†meta-platform. Despite the widespread usage of open standards and formats, the real potential for interoperability along the digital TV filière has been modest, and mostly limited to the transmission segment. This is mainly due to the strong proprietary features characterizing the TV sector, where viable content production and provision rests on effective control of content IPR. Further, patent portfolio strategies and control of crucial copyrights become increasingly central for competing in the converging TV sector, where former telecom companies, traditional TV operators and new OTT players strive to become gatekeepers of essential layers of the new IP-based delivery platforms. To sum up, while technological opportunities today do enable pervasive media interoperability and affordable convergence at the user-level, private incentives relentlessly push the industry toward standards fragmentation and the construction of walled gardens.
    Keywords: standards, IPR strategies, convergence, DVB, digital TV.
    JEL: L12 L15 L40 L52 L82 O34
    Date: 2013–05
  5. By: Kabiraj, Tarun; Sinha, Uday Bhanu
    Abstract: We construct a model to show that outsourcing of a crucial input can occur even though it can be produced in-house at a lower cost. There are two firms producing differentiated goods and competing in prices, and only one of them possesses input production technology which is superior to that of an independent input supplier. We show that if the degree of product differentiation is small or the technological gap between two input producing firms is small, strategic outsourcing will occur. Technology transfer in the form of patent sale will act as a commitment that the firm will outsource. While the outsourcing firm gains, consumers’ welfare as well as social welfare goes down. Interestingly, sometimes rival firm’s profit might increase. The paper brings into focus some competition policy concerns.
    Keywords: Outsourcing; patent transfer; price competition; welfare; competition policy.
    JEL: D43 L22 L23 L24
    Date: 2014–04–15
  6. By: NAGAOKA Sadao; OWAN Hideo; ONISHI Koichiro
    Abstract: Given the expected fundamental reform of Article 35 of the Japanese patent law, which has been governing the transfer of ownership of employee inventions to firms, the freedom of designing the incentive system for inventors would increase significantly. In order to provide basic guiding principles for such design as well as for complementary policy measures, this paper presents new empirical evidence derived from the analyses using inventor surveys as well as insights from the survey of the theoretical literature on the optimal incentive scheme for innovation. Major findings are the following: while a variety of motivations drive inventions, intrinsic motivations such as satisfaction from solving challenging technical problems and that from contribution to scientific and technical progress are especially important, and inventions that are importantly driven by such motivations tend to have high inventive-step as well as high economic value. A wide menu of economic incentives for an inventor is available such as payment at invention disclosure and patent application, payment based on the commercialization of the patent, research freedom, promotion, salary increase, as well as their combinations. Evidence suggests that high quality inventions in Japan are significantly associated with a promotion and/or a salary increase for the inventor. The theory of incentive designs also suggests that a multitude of factors must be taken into account in the incentive design, including the risk bearing capability of an inventor, the monitoring possibility of a firm, research and development (R&D) characteristics, and the commitment power of a firm to long-term incentive. We further argue that the characteristics of the workforce sorted into the firm should also be considered in designing the optimal incentive scheme, as the data show that the effect of monetary incentives declines with the strength of the intrinsic motivations. Given the expected heterogeneity in the optimal incentive systems, it is imperative that firms compete in designing better incentive system for innovations. An important prerequisite for this is the freedom to design a clear ex-ante rule on the transfer of employee inventions' ownership. The government has to ensure that the contract and the agreement on the incentive system between the management and the employees to be respected as well as to support inventions with high spillover effects which otherwise might not be undertaken due to relatively small private benefits for the inventing firm.
    Date: 2014–09
  7. By: OECD
    Abstract: Digital content, such as e-books and apps that are available through streaming, downloads or cloud computing platforms, has become the fastest growing e-commerce product category. To support further growth, it is important that consumers, including children, understand what their rights and obligations are when acquiring and using such products. In particular, consumers need to know about the conditions under which they may copy and share products, and on which devices the products may be used. They also need to be informed about how their personal data may be collected and used, with whom it may be shared and why, and the type of redress that may be obtained when problems arise.
    Date: 2014–10–24

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