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Optimal patentability requirements with complementary innovations

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  • Denicolò, Vincenzo
  • Halmenschlager, Christine

Abstract

We study optimal patent design, contrasting the case that two or more innovations are needed to operate a new technology with the traditional case that a single innovation is directly commercialisable. The major finding is that with complementary innovations the patentability requirements should be stronger than in the case of stand-alone innovation. This reduces the fragmentation of intellectual property, which is socially costly. However, to preserve the incentives to innovate, if a patent is granted the strength of protection should be generally higher than in the stand-alone case.

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Bibliographic Info

Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 56 (2012)
Issue (Month): 2 ()
Pages: 190-204

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Handle: RePEc:eee:eecrev:v:56:y:2012:i:2:p:190-204

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Web page: http://www.elsevier.com/locate/eer

Related research

Keywords: Patents; Complementary innovations; Patentability requirements; Fragmentation of intellectual property rights;

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References

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  1. Carl Shapiro, 2003. "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting," Law and Economics 0303005, EconWPA.
  2. Glenn C. Loury, 1976. "Market Structure and Innovation," Discussion Papers 256, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  3. Griliches, Zvi, 1990. "Patent Statistics as Economic Indicators: A Survey," Journal of Economic Literature, American Economic Association, vol. 28(4), pages 1661-1707, December.
  4. Gilbert, Richard J & Katz, Michael L, 2009. "Efficient Division of Profits from Complementary Innovations," Competition Policy Center, Working Paper Series qt5mr0s11v, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
  5. Suzanne Scotchmer & Jerry Green, 1990. "Novelty and Disclosure in Patent Law," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 131-146, Spring.
  6. Carl Shapiro, 2010. "Injunctions, Hold-Up, and Patent Royalties-super-1," American Law and Economics Review, Oxford University Press, vol. 12(2), pages 509-557.
  7. Vincenzo Denicolo, 2007. "Do patents over-compensate innovators?," Economic Policy, CEPR;CES;MSH, vol. 22, pages 679-729, October.
  8. James Bessen & Michael J. Meurer, 2008. "Introduction to Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk
    [Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk]
    ," Introductory Chapters, Princeton University Press.
  9. Lee, Tom & Wilde, Louis L, 1980. "Market Structure and Innovation: A Reformulation," The Quarterly Journal of Economics, MIT Press, vol. 94(2), pages 429-36, March.
  10. Ménière, Yann, 2008. "Patent law and complementary innovations," European Economic Review, Elsevier, vol. 52(7), pages 1125-1139, October.
  11. repec:fth:harver:1473 is not listed on IDEAS
  12. M.A. La Manna, Manfredi, 1992. "Optimal patent life vs optimal patentability standards," International Journal of Industrial Organization, Elsevier, vol. 10(1), pages 81-89, March.
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