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The Utility Standard and the Patentability of Intermediate Technology

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  • Reiko Aoki
  • Sadao Nagaoka

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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File URL: http://hi-stat.ier.hit-u.ac.jp/research/discussion/2004/pdf/D04-75.pdf
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Bibliographic Info

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

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Cited by:
  1. Aoki, Reiko & Kao, Tina, 2012. "Protection of basic research and R&D incentives in an international setting," CIS Discussion paper series 563, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  2. Jing-Yuan, Chiou, 2012. "In the shadow of giants," MPRA Paper 37033, University Library of Munich, Germany.
  3. 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.

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