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Knowledge disclosure as intellectual property rights

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  • Carlos J. Ponce

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Abstract

We study a model in which an inventor discloses knowledge about its innovation and then a rival chooses the probability of attaining a competing invention. Disclosures, by creating prior art, diminish the probability that the rival has of receiving a patent for its invention (legal externality), but, by revealing knowledge, they decrease the marginal cost of R&D (knowledge externality). We stress the following result. If the knowledge externality is large compared to the legal externality, decreasing the patentability standards leads to fewer disclosures and may hinder R&D. We also determine the impact of changes in market payoffs on the equilibrium level of disclosures and R&D.

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File URL: http://e-archivo.uc3m.es/bitstream/10016/1102/1/Disclosurepaper3_final.pdf
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Paper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we077140.

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Date of creation: Oct 2007
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Handle: RePEc:cte:werepe:we077140

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References

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  1. Vincenzo Denicolo & Luigi Alberto Franzoni, 2004. "Patents, Secrets, and the First-Inventor Defense," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 13(3), pages 517-538, 09.
  2. James J. Anton & Dennis A. Yao, 2004. "Little Patents and Big Secrets: Managing Intellectual Property," RAND Journal of Economics, The RAND Corporation, vol. 35(1), pages 1-22, Spring.
  3. Talia Bar, 2006. "Defensive Publications in an R&D Race," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 15(1), pages 229-254, 03.
  4. Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)," NBER Working Papers 7552, National Bureau of Economic Research, Inc.
  5. Lanjouw, Jean O & Schankerman, Mark, 2001. "Characteristics of Patent Litigation: A Window on Competition," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 129-51, Spring.
  6. Carlos J Ponce, 2007. "More Secrecy...More Knowledge Disclosure? On Disclosure Outside of Patents," Levine's Working Paper Archive 122247000000001600, David K. Levine.
  7. James J. Anton & Dennis A. Yao, 2003. "Patents, Invalidity, and the Strategic Transmission of Enabling Information," Journal of Economics & Management Strategy, Wiley Blackwell, Wiley Blackwell, vol. 12(2), pages 151-178, 06.
  8. 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.
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Cited by:
  1. Giacomo A. M. Ponzetto, 2008. "Intellectual property rights and efficient firm organization," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 1254, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2014.

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