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Hybrid Licensing of Product Innovations

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Author Info
Elisabetta Ottoz (Università di Torino)
Franco Cugno (Università di Torino)

Additional information is available for the following registered author(s):

Abstract

This paper shows that when a product innovation is protected by both patents and trade secrets, under U.S. law the innovator can be induced to license a rival even if patent protection is very broad and there are no partially competitive older products. This opportunity may benefit society. Nevertheless, some legal restrictions in force at the moment do not permit society to reap all potential gains. Since incentive and efficiency considerations suggest that a socially optimal contract should provide for both a negative fixed fee and post-patent royalties at the same unit level as before a patent’s expiration, we conclude that per se prohibitions of these practices are unjustified.

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File URL: http://www.bepress.com/cgi/viewcontent.cgi?article=1380&context=rle
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Publisher Info
Article provided by Berkeley Electronic Press in its journal Review of Law & Economics.

Volume (Year): 5 (2009)
Issue (Month): 1 ()
Pages:
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:bpj:rlecon:v:5:y:2009:i:1:n:24

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Web page: http://www.bepress.com/rle

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Related research
Keywords: patents; trade secrets; post-expiration royalties; hybrid licensing;

Other versions of this item:

Find related papers by JEL classification:
K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
O3 - Economic Development, Technological Change, and Growth - - Technological Change

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Cugno Franco & Ottoz Elisabetta, 2007. "Patent-secret mix in complex product firms," Department of Economics Working Papers 200707, University of Turin. [Downloadable!]
    Other versions:
  2. Maurer, Stephen M & Scotchmer, Suzanne, 2002. "The Independent Invention Defence in Intellectual Property," Economica, London School of Economics and Political Science, vol. 69(276), pages 535-47, November. [Downloadable!] (restricted)
  3. Gilbert, R. & Shapiro, C., 1988. "Optimal Patent Length And Breadth," Papers 28, Princeton, Woodrow Wilson School - Discussion Paper.
    Other versions:
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Statistics
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This page was last updated on 2009-12-20.

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