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Innovation beyond Patents: Technological Complexity as a Protection against Imitation

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  • Francisco Ruiz Aliseda

    (Ecole Polytechnique)

  • Emeric Henry

    (Département d'économie)

Abstract

A large portion of innovators do not patent their inventions. This is a relative puzzle since innovators are often perceived to be at the mercy of imitators in the absence of legal protection. In practice, innovators however invest actively in making their products technologically hard to reverse engineer. We consider the dynamics of imitation and investment in technological complexity, both by the innovator and by imitators. We show it can justify high level of proÖts beyond patents, can shed light on the regulation of reverse engineering and can explain delays in adoption of innovations.

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Paper provided by Sciences Po Departement of Economics in its series Sciences Po Economics Discussion Papers with number 2013-06.

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Date of creation: Jan 2013
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Handle: RePEc:spo:wpecon:info:hdl:2441/dambferfb7dfprc9m0533i43h

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  1. Henry, Emeric & Ruiz-Aliseda, Francisco, 2012. "Innovation Beyond Patents: Technological Complexity as a Protection against Imitation," CEPR Discussion Papers 8870, C.E.P.R. Discussion Papers.
  2. Farrell, Joseph & Saloner, Garth, 1987. "Coordination Through Committees and Markets," Department of Economics, Working Paper Series qt5sn4b6v4, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  3. Andreas Park & Lones Smith, 2008. "Caller Number Five and Related Timing Games," Working Papers tecipa-317, University of Toronto, Department of Economics.
  4. Bertomeu, Jeremy, 2009. "Endogenous shakeouts," International Journal of Industrial Organization, Elsevier, vol. 27(3), pages 435-440, May.
  5. Carlos J. Ponce & Emeric Henry, 2009. "Waiting to imitate: on the dynamic pricing of knowledge," Sciences Po publications info:hdl:2441/c8dmi8nm4pd, Sciences Po.
  6. Sahuguet, Nicolas, 2006. "Volunteering for heterogeneous tasks," Games and Economic Behavior, Elsevier, vol. 56(2), pages 333-349, August.
  7. 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.
  8. Nancy T. Gallini, 1992. "Patent Policy and Costly Imitation," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 52-63, Spring.
  9. Boldrin,Michele & Levine,David K., 2008. "Against Intellectual Monopoly," Cambridge Books, Cambridge University Press, number 9780521879286, October.
  10. Ronny Razin & Mariagiovanna Baccara, 2008. "Bargaining Over New Ideas: Rent Distribution and Stability of Innovative Firms," Working Papers 08-6, New York University, Leonard N. Stern School of Business, Department of Economics.
  11. Klaus Kultti & Tuomas Takalo & Juuso Toikka, 2007. "Secrecy versus patenting," RAND Journal of Economics, RAND Corporation, vol. 38(1), pages 22-42, 03.
  12. Bronwyn H. Hall & Christian Helmers & Mark Rogers & Vania Sena, 2012. "The Choice between Formal and Informal Intellectual Property: A Literature Review," NBER Working Papers 17983, National Bureau of Economic Research, Inc.
  13. 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, vol. 93(5), pages 837-58, October.
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Cited by:
  1. Francisco Ruiz Aliseda & Emeric Henry, 2013. "Innovation beyond Patents: Technological Complexity as a Protection against Imitation," Sciences Po publications 2013-06, Sciences Po.

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