nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2015‒01‒26
eight papers chosen by
Giovanni Ramello
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. Are Patent Fees Effective at Weeding Out Low-Quality Patents? By Gaétan de Rassenfosse; Adam B. Jaffe
  2. Intellectual property rights hinder sequential innovation: experimental evidence By Brueggemann, J.; Crosetto, P.; Meub, L.; Bizer, K.
  3. Intellectual property provisions in regional trade agreements: Revision and update By Valdés, Raymundo; McCann, Maegan
  4. Relationship-Speci…c Investments and Intellectual Property Rights Enforcement with Heterogeneous Suppliers By A. Naghavi; S. Peng; Y. Tsai
  5. The Kernel of a Patent Licensing Game By Shin Kishimoto; Naoki Watanabe
  6. Optimal production channel for private labels: Too much or too little innovation? By Claire Chambolle; Clémence Christin; Guy Meunier
  7. Intangible assets and firm-level productivity By Crass, Dirk; Peters, Bettina
  8. Mobility of ideas for innovation: The role of inventor-specific knowledge flows By Koski, Heli; Pajarinen, Mika

  1. By: Gaétan de Rassenfosse (École polytechnique fédérale de Lausanne); Adam B. Jaffe (Motu Economic and Public Policy Research)
    Abstract: The paper investigates whether patent fees are an effective mechanism to deter the filing of low-quality patent applications. The study analyses the effect of the Patent Law Amendment Act of 1982, which resulted in a substantial increase in patenting fees at the U.S. Patent and Trademark Office, on patent quality. Results from a series of difference-in-differences regressions suggest that the increase in fees led to a weeding out of low-quality patents. About 16–17 per cent of patents in the lowest quality decile were filtered out. The figure reaches 24–30 per cent for patents in the lowest quality quintile. However, the fee elasticity of quality decreased with the size of the patent portfolio held by applicants. The study has strong policy implications in the current context of concerns about declines in patent quality and the financial vulnerability of patent offices.
    Keywords: Patents; Patent fees; Patent quality; Innovation; Invention
    JEL: K2 O31 O34 O38
    Date: 2015–01
  2. By: Brueggemann, J.; Crosetto, P.; Meub, L.; Bizer, K.
    Abstract: In this paper we contribute to the discussion on whether intellectual property rights foster or hinder innovation by means of a laboratory experiment. We introduce a novel Scrabble-like creativity task that captures most essentialities of a sequential innovation process. We use this task to investigate the effects of intellectual property allowing subjects to assign license fees to their innovations. We find intellectual property to have an adverse effect on welfare as innovations become less frequent and less sophisticated. Communication among innovators is not able to prevent this detrimental effect. Introducing intellectual property results in more basic innovations and subjects fail to exploit the most valuable sequential innovation paths. Subjects act more self-reliant and non-optimally in order to avoid paying license fees. Our results suggest that granting intellectual property rights hinders innovations, especially for sectors characterized by a strong sequentiality in innovation processes.
    JEL: C91 D89 K39
    Date: 2015
  3. By: Valdés, Raymundo; McCann, Maegan
    Abstract: This is a revision and update of "Intellectual Property Provisions in Regional Trade Agreements" by Valdés and Runyowa (2012). This paper adjusts the methodology applied to assess the intellectual property (IP) provisions contained in regional trade agreements (RTAs) and the aggregation of such provisions into groups; it also updates the RTAs surveyed, from 194 in November 2010 to 245 in February 2014. New information contained in this revision relates to three IP-related investment and non-violation provisions in RTAs. The methodological revisions and new information result in changes to the assessment of the IP content of certain RTAs while the update reveals a growing and increasingly complex network of RTAs with IP content. This revision also provides new insights into possible improvements to the methodological toolkit for analysing IP in RTAs. The paper assembles detailed information about the IP provisions contained in active RTAs notified to the WTO. The goal was to expand beyond the more commonly studied RTAs, to review the full array of agreements notified to the WTO and thus to enable consideration of the implications of this diverse range of norm-setting activity for the multilateral system. Mapping of the IP content in RTAs involving parties from all regions and levels of development is necessary to better understand cross-cutting trends in RTAs, and how all the parts of the international IP framework influence each other. [...]
    Keywords: Regional Trade Agreements,Intellectual Property Rights,WTO,TRIPS
    JEL: F13 F15 F53 O34
    Date: 2014
  4. By: A. Naghavi; S. Peng; Y. Tsai
    Abstract: This paper examines the impact of intellectual property rights (IPR) enforcement on multinationals' choice of input suppliers and industry profi…ts in a host economy. The framework consists of suppliers with heterogeneous capabilities who must engage in a relation-specifi…c investment to customize intermediate inputs upon a transfer payment by fi…nal producers. An outsourcing contract with better technologically-endowed suppliers requires a lower transfer and generates a higher surplus. Stronger IPR enforcement leads fi…rms to self-select into better quality suppliers on average by reducing their outside option. Weak legal institutions instead make it possible for a larger range of suppliers, including the less capable ones, to form partnerships by granting them a larger outside option. A better IPR environment is more likely to harm lagging countries where the technology distribution is characterized by less capable suppliers.
    JEL: O34 L24 F21 F23 O32 L22 D23
    Date: 2015–01
  5. By: Shin Kishimoto; Naoki Watanabe
    Abstract: This paper considers general bargaining outcomes under coalition structures formed by an external patent holder and firms in oligopoly markets. The main propositions are as follows. For each coalition structure, the kernel is a singleton; thus, the number of licensees that maximizes the patent holder's revenue can be determined. The upper and lower bounds of the kernel are specified for each coalition structure. We also provide sufficient conditions for the number of licensees that maximizes their total surplus to be optimal for the patent holder. Length: 30 pages
  6. By: Claire Chambolle (INRA-UR1303 ALISS); Clémence Christin (Normandie Université, UCBN, CREM-UMR CNRS 6211); Guy Meunier (INRA-UR1303 ALISS)
    Abstract: We analyze the impact of the private label production channel on innovation. A retailer may either choose to integrate backward with a small firm (insourcing) or rely on a national brand manufacturer (outsourcing) to produce its private label. The trade-off between insourcing and outsourcing strategies is a choice between too much or too little innovation (i.e. quality investment) on the private label. When insourcing, an outside-option effect leads the retailer to over-invest to increase its buyer power. When outsourcing, a hold-up effect leads to under-investment. In addition, selecting the national brand manufacturer may create economies of scale that spur innovation.
    Keywords: Private label, vertical relations, buyer power, innovation
    JEL: L14 L15 L42
    Date: 2014–07
  7. By: Crass, Dirk; Peters, Bettina
    Abstract: Firms invest huge amounts into intangible assets. This paper explores to which extent different kinds of intangible assets are conducive to firm-level productivity. Our study contributes to the literature by simultaneously comparing productivity effects of innovative capital, human capital, branding capital and organizational capital and testing whether complementarity or substitutability exists between different intangible assets. Using panel data for the period 2006-2010, our econometric estimates confirm strong positive productivity effects of human capital and branding capital. Results for innovative capital are found to be mixed. While R&D has a strong positive impact on productivity, design & licences and patents show only weak productivity enhancing effects. The same holds for organizational capital. We furthermore detect several complementarities among different kind of intangible assets. Our results are robust to various parametric (OLS, FE) and non-parametric (Olley and Pakes, Levinsohn and Petrin) productivity estimation methods.
    Keywords: Intangible capital,productivity,R&D,marketing,firm-specific human capital,organizational capital,patents,trademarks
    JEL: O33 C23 J24 L22
    Date: 2014
  8. By: Koski, Heli; Pajarinen, Mika
    Abstract: Our data from 351 innovating firms for the years 2001–2012 generally suggest that patentable ideas are strongly linked to the mobility of individual inventors, or that the knowledge flows transmitted are sticky inventor-specific. In other words, the larger the knowledge pool of an inventor entering (leaving) the firm, the more the firm’s innovation performance increases (decreases). However, our separate estimations for six different technology classes suggest that this does not apply for all technologies. Our data indicate that the knowledge flows are mobile inventor-specific for chemicals and pharmaceuticals and mechanical engineering such that the mobility of an inventor to a firm increases its innovation performance but the mobility of an inventor from a firm does not affect its innovation performance. We further find that particularly innovation coopetition (i.e., collaboration with a firm’s competitors) is an important source of knowledge spillovers. Furthermore, the magnitude of overall localized innovation activity positively relates to the firm’s innovation performance providing support for agglomeration externalities.
    Keywords: labor mobility, knowledge spillovers, patents, innovation
    JEL: J62 D22 D62 L2 O3
    Date: 2015–01–05

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