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More secrecy... more knowledge disclosure? : On disclosure outside of patents

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  • Carlos J. POnce

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Abstract

It is an important concern that innovators by waiving their patent rights might obstruct the disclosure of knowledge and therefore retard progress. This paper explores this concern by using a simple model of two innovators who must decide sequentially whether to protect an innovation with limited patent rights. Two features are crucial to the disclosure decision. First: the second inventor may use his valid patent right to exclude the first inventor from using a secret invention. Second: when waiving her patent right, the first inventor may disclose her knowledge outside of a patent. Disclosure informs the Patent Office and courts that related inventions from later inventors may lack novelty and hence should not be protected by valid patent rights. This paper shows that when the first inventor chooses not to patent the innovation, the amount of disclosure is related to the intellectual property choices in a paradoxical way: the amount of disclosure will be ‘large’ (‘small’) when the second inventor chooses secrecy (patenting) to protect the innovation too.

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Bibliographic Info

Paper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we077241.

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Date of creation: Oct 2007
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Handle: RePEc:cte:werepe:we077241

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References

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  1. Stephen M Maurer & Suzanne Scotchmer, 2003. "The Independent Invention Defense in Intellectual Property," Levine's Working Paper Archive 618897000000000544, David K. Levine.
  2. 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.
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  4. Shapiro, Carl, 2005. "Prior User Rights," Competition Policy Center, Working Paper Series, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley qt2dc6p04t, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
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  6. 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.
  7. 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.
  8. Crampes, Claude & Langinier, Corinne, 2002. "Litigation and Settlement in Patent Infringement Cases," Staff General Research Papers, Iowa State University, Department of Economics 5231, Iowa State University, Department of Economics.
  9. Edwin Mansfield, 1986. "Patents and Innovation: An Empirical Study," Management Science, INFORMS, INFORMS, vol. 32(2), pages 173-181, February.
  10. Lemley, Mark A. & Shapiro, Carl, 2004. "Probabilistic Patents," Competition Policy Center, Working Paper Series, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley qt9xf1488p, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
  11. Klaus Kultti & Tuomas Takalo & Juuso Toikka, 2006. "Simultaneous Model of Innovation, Secrecy, and Patent Policy," American Economic Review, American Economic Association, American Economic Association, vol. 96(2), pages 82-86, May.
  12. James Bessen & Michael J. Meurer, 2005. "Patent Litigation with Endogenous Disputes," Working Papers, Research on Innovation 0502, Research on Innovation.
  13. Milgrom, Paul & Roberts, John, 1994. "Comparing Equilibria," American Economic Review, American Economic Association, American Economic Association, vol. 84(3), pages 441-59, June.
  14. 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.
  15. 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.
  16. James Bessen & Michael J. Meurer, 2005. "The Patent Litigation Explosion," Working Papers, Research on Innovation 0501, Research on Innovation.
  17. Horstmann, Ignatius & MacDonald, Glenn M & Slivinski, Alan, 1985. "Patents as Information Transfer Mechanisms: To Patent or (Maybe) Not to Patent," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 93(5), pages 837-58, October.
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Cited by:
  1. 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.
  2. Michele Boldrin & David K. Levine, 2013. "The Case against Patents," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 27(1), pages 3-22, Winter.
  3. Michele Boldrin & David K. Levine, 2012. "The case against patents," Working Papers, Federal Reserve Bank of St. Louis 2012-035, Federal Reserve Bank of St. Louis.
  4. Joachim Henkel & Stefanie Pangerl, 2008. "Defensive Publishing An Empirical Study," DRUID Working Papers, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies 08-04, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  5. Michele Boldrin & David K Levine, 2012. "The Case Against Patents," Levine's Working Paper Archive 786969000000000465, David K. Levine.
  6. Carlos J. Ponce, 2007. "Knowledge disclosure as intellectual property rights," Economics Working Papers we077140, Universidad Carlos III, Departamento de Economía.

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