nep-ipr New Economics Papers
on Intellectual Property Rights
Issue of 2018‒09‒10
four papers chosen by
Giovanni Ramello
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. Some Simple Economics of Patent Protection for Complex Technologies By Denicolò, Vincenzo; Zanchettin, Piercarlo
  2. Patent Thickets Identification By GÄ…tkowski, Mateusz; Dietl, Marek; Skrok, Lukasz; Whalen, Ryan; Rockett, Katharine
  3. Trade Secrets and Innovation: Evidence from the "Inevitable Disclosure" Doctrine By Barankay, Iwan; Contigiani, Andrea; Hsu, David
  4. Purchase, Pirate, Publicize: Private-Network Music Sharing and Market Album Sales By Lee, Jonathan F.

  1. By: Denicolò, Vincenzo; Zanchettin, Piercarlo
    Abstract: We analyze patent protection when innovative technologies are "complex" in that they involve sequential and complementary innovations. We argue that complexity affects the classic Nordhaus trade-off between innovation and static monopoly distortions. We parametrize the degree of sequentiality and that of complementarity and show that the optimal level of patent protection increases with both. We also address the issue of the optimal division of profit among different innovators.
    Keywords: Complementarity; Division of profit; Elasticity of the supply of inventions; Patent design; Sequential innovation
    JEL: O30 O40
    Date: 2018–07
  2. By: GÄ…tkowski, Mateusz; Dietl, Marek; Skrok, Lukasz; Whalen, Ryan; Rockett, Katharine
    Abstract: Patent thickets have been identified by various citations-based techniques, such as Graevenitz et al (2011) and Clarkson (2005). An alternative direct measurement is based on expert opinion. We use natural language processing techniques to measure pairwise semantic similarity of patents identified as thicket members by experts to create a semantic network. We compare the semantic similarity scores for patents in different expert-identified thickets: those within the same thicket, those in different thickets, and those not in thickets. We show that patents within the same thicket are significantly more semantically similar than other pairs of patents. We then present a statistical model to assess the probability of a newly added patent belonging to a thicket based on semantic networks as well as other measures from the existing thicket literature (the triples of Graevenitz and Clarkson’s density ratio). We conclude that combining information from semantic distance with other sources can be helpful to isolate the patents that are likely to be members of thickets.
    Keywords: Patent Thickets Identification, Intellectual Property, Patenting, Patent Thickets, Semantic Distance, Latent Semantic Analysis, Natural Language Processing, Complexity
    Date: 2018–09–04
  3. By: Barankay, Iwan; Contigiani, Andrea; Hsu, David
    Abstract: Does heightened employer-friendly trade secrecy protection help or hinder innovation? By examining U.S. state-level legal adoption of a doctrine allowing employers to curtail inventor mobility if the employee would "inevitably disclose" trade secrets, we investigate the impact of a shifting trade secrecy regime on individual-level patenting outcomes. Using a difference-in-differences design taking un-affected U.S. inventors as the comparison group, we find strengthening employer-friendly trade secrecy adversely affects innovation. We then investigate why. We do not find empirical support for diminished idea recombination from suppressed inventor mobility as the operative mechanism. While shifting intellectual property protection away from patenting into trade secrecy has some explanatory power, our results are consistent with reduced individual-level incentives to signaling quality to the external labor market.
    Keywords: Innovation; inter-firm mobility; knowledge workers; labor markets; signalling; trade secrets
    JEL: J08 O31 O34
    Date: 2018–07
  4. By: Lee, Jonathan F.
    Abstract: I quantify the effects of private-network music sharing on aggregate album sales in the BitTorrent era using a panel of US sales and private-network downloads for 2,109 albums during 2008. Exogenous shocks to the network's sharing constraints address the simultaneity problem. In theory, private- network activity could crowd out sales by building aggregate file sharing ca- pacity or increase sales through word of mouth. I find evidence that private- network sharing results in decreased album sales for top{tier artists, though the economic impact is quite modest. However, private-network activity seems to help mid{tier artists. The results are consistent with claims that word of mouth is stronger for lesser-known artists and that digital sales are more vulnerable to increases in file sharing capacity. I discuss policy implica- tions and alternatives to costly legal efforts to shut down private le sharing networks.
    Keywords: Financial Economics
    Date: 2018–01

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