nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2015‒08‒13
ten papers chosen by
Giovanni Ramello
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. Innovation in the European Digital Single Market: The Role of Patents By Chryssoula Pentheroudakis
  2. Business Dynamics of Innovating Firms: Linking U.S. Patents with Administrative Data on Workers and Firms By Stuart Graham; Cheryl Grim; Tariqul Islam; Alan Marco; Javier Miranda
  3. Patents and the Success of Venture-Capital Backed Startups: Using Examiner Assignment to Estimate Causal Effects By Patrick Gaule
  4. Fair, Reasonable and Non-Discriminatory (FRAND) Licensing Terms - Research Analysis of a Controversial Concept By Yann Ménière
  5. Measuring patent quality in international comparison: Index development and application to China By Boeing, Philipp; Mueller, Elisabeth
  6. Modelling and Forecasting Branded and Generic Pharmaceutical Life Cycles: Assessment of the Number of Dispensed Units By S. Buxton; Kostas Nikolopoulos; M. Khammash; P. Stern
  7. Cross-Licensing and Competition By Jeon, Doh-Shin; Lefouili, Yassine
  8. Exploring pathways of regional technological development in China through patent analysis By Kroll, Henning
  9. Do native and migrant workers contribute to innovation? Patents dynamic in France, Germany and the UK By Claudio Fassio; Alessandra Venturini
  10. The optimal scope of trade secrets law By L. A. Franzoni; A. Kumar Kaushik

  1. By: Chryssoula Pentheroudakis
    Abstract: The Institute for Prospective Technological Studies of the Joint Research Centre (JRC) organised the Conference "Innovation in the European digital single market - The Role of Patents". This conference aimed to provide reliable evidence based on patent data analysis to support European innovation policies for a Digital Single Market. The advancement of the digital economy in Europe does not only bring unmatched opportunities, but also a series of challenges in the area of intellectual property rights. This is particularly true for the patent system which has to strike the right balance between providing incentives for research and development investments while enabling at the same time the dissemination and re-use of technological knowledge. The difficulties of striking this balance are most apparent in the field of Information and Communications Technologies (ICT), where standardization and interoperability are important for the implementation of a Digital Single Market. In order to pin down the role of patents in the new digital economy, it is important to look at the broader economic, legal, technological and policy context and achieve a better understanding of what is at stake in the current dynamics. It is a volatile landscape marked by patent wars, high litigation costs, overlapping rights, hold-up scenarios in the field of standardization and radical market shifts deriving from convergent technologies and emerging platform-centric business models. Against this background, the stakes are high with regards to many issues: interoperability, reasonable and timely access to key technologies and technical knowledge, legal certainty, unfettered competition and a secured return on investment in research and development.
    Keywords: Innovation, Digital Single Market, patents
    Date: 2015–07
  2. By: Stuart Graham; Cheryl Grim; Tariqul Islam; Alan Marco; Javier Miranda
    Abstract: This paper discusses the construction of a new longitudinal database tracking inventors and patent-owning firms over time. We match granted patents between 2000 and 2011 to administrative databases of firms and workers housed at the U.S. Census Bureau. We use inventor information in addition to the patent assignee firm name to and improve on previous efforts linking patents to firms. The triangulated database allows us to maximize match rates and provide validation for a large fraction of matches. In this paper, we describe the construction of the database and explore basic features of the data. We find patenting firms, particularly young patenting firms, disproportionally contribute jobs to the U.S. economy. We find patenting is a relatively rare event among small firms but that most patenting firms are nevertheless small, and that patenting is not as rare an event for the youngest firms compared to the oldest firms. While manufacturing firms are more likely to patent than firms in other sectors, we find most patenting firms are in the services and wholesale sectors. These new data are a product of collaboration within the U.S. Department of Commerce, between the U.S. Census Bureau and the U.S. Patent and Trademark Office.
    Date: 2015–07
  3. By: Patrick Gaule
    Abstract: I study how patents affect firm success (initial public offering or acquisition at a high price) in a sample of 2,191 U.S. startups applying for patent protection in the 24 months following their first round of venture capital funding. I observe both successful and unsuccessful patent applications and use a measure of patent exam- iner leniency as an instrument for getting patents. I find a positive effect of patents on firm success for life science firms but not for information technology firms.
    Keywords: patents; entrepreneurship; venture capital; patent examiners; acquisition; initial public offering;
    JEL: O34 G24 L26
    Date: 2015–07
  4. By: Yann Ménière (Cerna, MINES ParisTech)
    Abstract: The complexity of standards in Information and Communication Technology (ICT) creates a tension between the need to reward the owners of Standard Essential Patents (SEPs) that may cover standard specifications and the need to make standards available to all for public use. In the last few years, this tension has crystallized into a difficult debate on licensing principles that must be Fair, Reasonable and Non-Discriminatory (FRAND or FRAND licensing). The purpose of this report is to provide a balanced account of the current controversy relating to the FRAND licensing of standard essential patents and to explore future research topics in this area. It draws on the arguments that arose at an expert workshop held under Chatham House rules at the Institute for Prospective Technological Studies (IPTS) and on an extensive review of the related literature.
    Keywords: standard essential patents, licensing, standards, standard setting organizations, fair, reasonable, non-discriminatory licensing terms, information and communication technologies
    JEL: F23 H41 L11 L15 L24 L96 L98 O31 O32 O33 O34 O38
    Date: 2015–07
  5. By: Boeing, Philipp; Mueller, Elisabeth
    Abstract: We develop an index that compares the quality of Patent Cooperation Treaty (PCT) applications by considering citations generated by International Search Reports (ISRs). In its most restrictive variation, i.e. excluding citations from the home country and self-citations, the ISR index is not biased by selectivity in filing strategies, differences in citations due to varying national examination procedures, or domestic economic policies. Against the background of strong increases in Chinese patenting between 2001 and 2009, we compare the quality of Chinese PCT applications with those from high-income countries. Chinese PCT applications achieve only 34% of the quality level of international PCT applications. In addition, their quality is decreasing over time. We find that the patent quality of firms increases in R&D stocks but decreases with the introduction of PCT subsidies. Our results confirm that China's expansion of international filings was achieved to the detriment of quality.
    Keywords: patent quality,PCT system,China
    JEL: O34 O32
    Date: 2015
  6. By: S. Buxton (Swansee University); Kostas Nikolopoulos (Bangor University); M. Khammash (University of Sussex); P. Stern (University of Exeter)
    Abstract: In this paper, modelling and forecasting pharmaceutical life cycles are investigated, specifically at the time of patent expiry when the generic form of the product could be introduced to the market, while the branded form is still available for prescription. Assessing the number of dispensed units of branded and generic forms of pharmaceuticals is increasingly important due to the irrelatively large market value in the United Kingdom and the limited number of new ÔblockbusterÕ branded drugs. As a result, pharmaceutical companies make every effort to extend the commercial life of their branded products and forecast their sales in the future, while public health institutes seek insights for effective governance as the use of a branded drug, when a generic form is available. In this paper, eleven methods are used to model and forecast drugs life cycles: Bass Diffusion, Repeat Purchase Diffusion Model, Exponential Smoothing, Holt Winters Exponential Smoothing, Moving Averages, ARIMA, Regression over t, Regression over t-1, Robust Regression, Na•ve and Na•ve with drift. The results suggest a difference depending on the forecasting horizon with the ARIMA model and Holt Winters Exponential Smoothing both producing accurate short term forecasts. However for 3-5 year forecasts the results suggest that a very simple forecasting model blended with an addition of a small trend provides the most accurate forecasts for both branded and generic pharmaceuticals
    Date: 2015–04
  7. By: Jeon, Doh-Shin; Lefouili, Yassine
    Abstract: We study bilateral cross-licensing agreements among N (> 2) competing firms. We find that the fully cooperative royalty, i.e., the one that allows them to achieve the monopoly profit, can be sustained as the outcome of bilaterally efficient agreements, regardless of whether the agreements are public or private and whether firms compete in quantities or prices. We extend this monopolization result to a general class of two-stage games in which firms bilaterally agree in the first stage to make each other payments that depend on their second-stage non-cooperative actions. Policy implications regarding the antitrust treatment of cross-licensing agreements are derived.
    Keywords: Cross-Licensing, Royalties, Collusion, Antitrust and Intellectual Property.
    JEL: D43 L13 L24 L41 O34
    Date: 2015–05–19
  8. By: Kroll, Henning
    Abstract: [Introduction] Over the course of the past two decades, China has evolved from a nation focused on production to a technologically dynamic one with the ambition to catch up with the world's leading economies by 2050 (Schwaag Serger and Breidne 2007; State Council (of the People's Republic of China) 2006). Since 2011, it has become the nation with largest annual patent output in the world (Reuters 2011). At the same time, however, China also remains a huge country in which substantive disparities continue to prevail (Kroll 2010; Liefner and Wei 2013). For a long time, talking about new technological trends and growing capacity in China was almost identical to talking about new devel-opments in Beijing, Guangdong, and Greater Shanghai. At the same time, this meant talking about two separate research systems, a public and an industrial one that were distinct, not only in terms of their legacy and internal logics (Motohashi 2008), but also in terms of their geographical representation (Kroll and Frietsch 2014; Kroll and Schiller 2010). As a result, meaningful knowledge transfer between these two systems only occurred in a limited number of 'islands of innovation', where regionally unique systems of co-operation had developed over the years (Kroll and Liefner 2008; Kroll and Schiller 2010). [...]
    Date: 2015
  9. By: Claudio Fassio; Alessandra Venturini
    Abstract: This paper uses the French and the UK Labour Force Surveys and the German Microcensus to estimate the effects of different components of the labour force on innovation at the sectoral level between 1994 and 2005. The authors focus, in particular, on the contribution of migrant workers. We adopt a production function approach in which we control for the usual determinants of innovation, such as R&D investments, stock of patents and openness to trade. To address possible endogeneity of migrants we implement instrumental variable strategies using both two-stage least squares with external instruments and GMM-SYS with internal ones. In addition we also account for the possible endogeneity of native workers and instrument them accordingly. Our results show that highly-educated migrants have a positive effect on innovation even if the effect is smaller relative to the positive effect of educated natives. Moreover, this positive effect seems to be confined to the high-tech sectors and among highly-educated migrants from other European countries.
    Keywords: Innovation, Migration, Skills, Human capital
    JEL: O31 O33 F22 J61
    Date: 2015–06
  10. By: L. A. Franzoni; A. Kumar Kaushik
    Abstract: The paper investigates the optimal scope of trade secrets law. In the model, one innovative firm invests resources first to produce knowledge, and then to protect it from unwanted disclosure. A rival firm invests to ferret out this knowledge. Trade secrets law affects this "secrecy contest" by reducing the probability of unwanted disclosure given the efforts of the parties. We show how optimal trade secrets policy depends on structural market features and cost parameters. In the final section, we consider the limit case in which the innovation lies on the face of the product, and derive the optimal scope of legal provisions preventing copycat imitation of products (unfair competition, passing off).
    JEL: K1 L1
    Date: 2015–07

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