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The Utility Standard and the Patentability of Intermediate Technology

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Author Info
Reiko Aoki
Sadao Nagaoka

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Abstract

We explore the consequences of the utility requirement on speed of innovation and welfare. A weak utility requirement means that an intermediate technology with no immediate application or commercial value is patentable. Using a model of two stage innovation with free entry and trade secrecy, we identify cases when patentability is beneficial to society. Although a firm may undertake basic research protected by trade secrecy, patentability is still desirable when spillover is high and innovation costs are high. However, patentability becomes less desirable as basic research costs decrease. We also show that high value of final technology by itself does not favor non-patentability and identify condition when it does.

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Paper provided by Institute of Economic Research, Hitotsubashi University in its series Hi-Stat Discussion Paper Series with number d04-75.

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Date of creation: Feb 2005
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Handle: RePEc:hst:hstdps:d04-75

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Related research
Keywords: utility requirement; basic research; patentability; innovation;

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Find related papers by JEL classification:
O34 - Economic Development, Technological Change, and Growth - - Technological Change - - - Intellectual Property Rights
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives

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  1. Masuyuki Nishijima, 2004. "Effects of the Anticommons on R&D: The Case of University Corporation in Japan," Econometric Society 2004 Far Eastern Meetings 647, Econometric Society. [Downloadable!]
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