Hybrid Licensing of Product Innovations
AbstractThis 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 patents expiration, we conclude that per se prohibitions of these practices are unjustified.
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Bibliographic InfoArticle provided by De Gruyter in its journal Review of Law & Economics.
Volume (Year): 5 (2009)
Issue (Month): 1 (October)
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Web page: http://www.degruyter.com
Other versions of this item:
- Ottoz Elisabetta & Cugno Franco, 2008. "Hybrid Licensing of Product Innovations," Department of Economics and Statistics Cognetti de Martiis. Working Papers 200810, University of Turin.
- 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; Research and Development; Intellectual Property Rights
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