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University licensing of patents for varietal innovations in agriculture

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  • Bradley J. Rickard
  • Timothy J. Richards
  • Jubo Yan

Abstract

There has been a sharp increase in the number of patented agricultural varieties from public universities in the United States. We develop an experiment to examine the revenue stream to universities from licensing plant-based innovations. In the experiment we asked subjects to bid for access for a patented input that would be used to produce a differentiated product; treatments were employed to solicit bids that were financed by fees, royalties, and a combination of the two mechanisms under exclusive and nonexclusive contracts. The literature studying the economics of downstream duopoly competition in quantity suggests that revenues for the innovator would be greatest under a nonexclusive contract that uses fees and royalties. In our experiment we allow more than two firms to obtain access to the patent in the nonexclusive treatments, and our empirical results suggest that innovator revenues are greatest when royalties are used alone in a nonexclusive contract.

Suggested Citation

  • Bradley J. Rickard & Timothy J. Richards & Jubo Yan, 2016. "University licensing of patents for varietal innovations in agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 47(1), pages 3-14, January.
    • Handle: RePEc:bla:agecon:v:47:y:2016:i:1:p:3-14
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    File URL: http://hdl.handle.net/10.1111/agec.12205
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    Cited by:

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    2. Kyle, Steven C., 2014. "Mineral Revenues and Countercyclical Macroeconomic Policy in Kazakhstan," Working Papers 180170, Cornell University, Department of Applied Economics and Management.
    3. Akhundjanov, Sherzod B. & Gallardo, R. Karina & McCluskey, Jill J. & Rickard, Bradley J., 2020. "Commercialization of a demand-enhancing innovation: The release of a new apple variety by a public university," Economic Modelling, Elsevier, vol. 86(C), pages 88-100.

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