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Imitation versus Innovation Costs: Patent policies under common patent length

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  • ICHIDA Toshihiro
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    Abstract

    This paper investigates the interaction between innovation and imitation costs for heterogeneous ideas (industries). It analyzes the effect of various patent-related policies under the common patent length across different industries. It also looks at a policy that will strengthen trade secrets such as the Soleau envelope policy. Under the common term of patent with moderate assumption about the joint distribution of costs, the model predicts the existence of imitating products which are successfully invented around the original patent.

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    File URL: http://www.rieti.go.jp/jp/publications/dp/13e054.pdf
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    Bibliographic Info

    Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 13054.

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    Length: 28 pages
    Date of creation: Jun 2013
    Date of revision:
    Handle: RePEc:eti:dpaper:13054

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    1. Denicolo, Vincenzo, 1996. "Patent Races and Optimal Patent Breadth and Length," Journal of Industrial Economics, Wiley Blackwell, vol. 44(3), pages 249-65, September.
    2. Shapiro, Carl, 2005. "Prior User Rights," Competition Policy Center, Working Paper Series qt2dc6p04t, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
    3. Sudipto Bhattacharya & Sergei Guriev, 2005. "Patents vs trade secrets: knowledge licensing and spillover," LSE Research Online Documents on Economics 444, London School of Economics and Political Science, LSE Library.
    4. J·n Z·bojnÌk, 2002. "A Theory of Trade Secrets in Firms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(3), pages 831-855, August.
    5. Nancy T. Gallini, 1992. "Patent Policy and Costly Imitation," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 52-63, Spring.
    6. Erkal, Nisvan, 2005. "The decision to patent, cumulative innovation, and optimal policy," International Journal of Industrial Organization, Elsevier, vol. 23(7-8), pages 535-562, September.
    7. Nordhaus, William D, 1972. "The Optimum Life on a Patent: Reply," American Economic Review, American Economic Association, vol. 62(3), pages 428-31, June.
    8. Olena Ivus, 2011. "Trade-related intellectual property rights: industry variation and technology diffusion," Canadian Journal of Economics, Canadian Economics Association, vol. 44(1), pages 201-226, February.
    9. Denicolo, Vincenzo, 1999. "The optimal life of a patent when the timing of innovation is stochastic," International Journal of Industrial Organization, Elsevier, vol. 17(6), pages 827-846, August.
    10. 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.
    11. 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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