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Knowledge disclosure as intellectual property rights protection

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  • Ponce, Carlos J.

Abstract

We consider the problem of an inventor who discloses knowledge under the threat of a rival who may patent a competing idea. Disclosure diminishes the probability that the rival has of receiving a patent (legal externality) but it also decreases the rival’s marginal R&D cost (knowledge externality). Our results reveal that: (i) when the knowledge externality is ‘large’ (‘small’) relative to the legal one, an increase (decrease) in the patentability standard leads to higher disclosure and promotes R&D and (ii) if subsequent research creates positive external effects, the patentability standard should be set to promote further disclosure and R&D in equilibrium. The impact on the equilibrium configuration of changes in market profits is also examined.

Suggested Citation

  • Ponce, Carlos J., 2011. "Knowledge disclosure as intellectual property rights protection," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 418-434.
  • Handle: RePEc:eee:jeborg:v:80:y:2011:i:3:p:418-434
    DOI: 10.1016/j.jebo.2011.04.005
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    7. Aoki, Reiko & Spiegel, Yossi, 2009. "Pre-grant patent publication and cumulative innovation," International Journal of Industrial Organization, Elsevier, vol. 27(3), pages 333-345, May.
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    Cited by:

    1. Jeon, Haejun, 2019. "Licensing and information disclosure under asymmetric information," European Journal of Operational Research, Elsevier, vol. 276(1), pages 314-330.
    2. Boldrin, Michele & Levine, David K., 2004. "Rent-seeking and innovation," Journal of Monetary Economics, Elsevier, vol. 51(1), pages 127-160, January.
    3. Malva, Antonio Della & Hussinger, Katrin, 2012. "Corporate science in the patent system: An analysis of the semiconductor technology," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 118-135.
    4. Bronwyn Hall & Christian Helmers & Mark Rogers & Vania Sena, 2014. "The Choice between Formal and Informal Intellectual Property: A Review," Journal of Economic Literature, American Economic Association, vol. 52(2), pages 375-423, June.
    5. Johnson, Justin P., 2014. "Defensive publishing by a leading firm," Information Economics and Policy, Elsevier, vol. 28(C), pages 15-27.
    6. Kang, Byeongwoo, 2015. "The innovation process of Huawei and ZTE: Patent data analysis," China Economic Review, Elsevier, vol. 36(C), pages 378-393.
    7. Hong, Xianpei & Zhou, Menghuan & Gong, Yeming, 2021. "Dilemma of quality information disclosure in technology licensing," European Journal of Operational Research, Elsevier, vol. 294(2), pages 543-557.

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    More about this item

    Keywords

    Disclosure; Legal externality; Knowledge externality; Transfer effect; Threat effect; Patentability standard; Market premium;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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