Advanced Search
MyIDEAS: Login

Patents and innovation : Are the brakes broken, or how to restore patents’ dynamic efficiency ?

Contents:

Author Info

  • Christian Le Bas
  • Julien Pénin

Abstract

The standard view of patents emphasizes their dynamic efficiency. It considers that, by providing firms with incentives to invest in R&D and to disclose their knowledge, patents encourage innovation and increase social welfare in the long run. Yet, a growing body of literature opposes this view and asks for patent reform or even for the abolition of the patent system. In this work, which reviews the most recent literature on patents, we show that patents can have a negative impact on the dynamics of innovation. This is not due to some intrinsic properties of the patent system but to some of its recent evolutions which mean that, nowadays, too many patents are granted and that patent information is bad. The combination of those two elements explains most of the problems induced by modern patent systems such as hold-up (patent trolls), anti-commons (royalty stacking), and high transaction costs in markets for technology. We conclude by showing that realistic reforms can solve those problems and ensure that the patent system becomes again an instrument of dynamic efficiency.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.beta-umr7522.fr/productions/publications/2014/2014-02.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg in its series Working Papers of BETA with number 2014-02.

as in new window
Length:
Date of creation: 2014
Date of revision:
Handle: RePEc:ulp:sbbeta:2014-02

Contact details of provider:
Postal: PEGE. 61, Aven. de la Forêt-Noire 67000 Strasbourg
Phone: +33 3 68 85 20 69
Fax: +33 3 68 85 20 70
Email:
Web page: http://www.beta-umr7522.fr/
More information through EDIRC

Related research

Keywords: Incentives; Patent; innovation policy; hold-up; trolls; anti-commons; markets for technology.;

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Georg Graevenitz & Stefan Wagner & Dietmar Harhoff, 2013. "Incidence and Growth of Patent Thickets: The Impact of Technological Opportunities and Complexity," Journal of Industrial Economics, Wiley Blackwell, vol. 61(3), pages 521-563, 09.
  2. Fiona E. Murray & Scott Stern, 2007. "Do Formal Intellectual Property Rights Hinder the Free Flow of Scientific Knowledge?: An Empirical Test of the Anti-Commons Hypothesis," NBER Chapters, in: Academic Science and Entrepreneurship: Dual Engines of Growth National Bureau of Economic Research, Inc.
  3. Ménière, Yann & Lévêque, François, 2008. "Early commitments help patent pool formation," PIE/CIS Discussion Paper 384, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  4. Kitch, Edmund W, 1977. "The Nature and Function of the Patent System," Journal of Law and Economics, University of Chicago Press, vol. 20(2), pages 265-90, October.
  5. Josh Lerner, 2009. "The Empirical Impact of Intellectual Property Rights on Innovation: Puzzles and Clues," American Economic Review, American Economic Association, vol. 99(2), pages 343-48, May.
  6. SHAVELL, Steven & VAN YPERSELE, Tanguy, . "Rewards versus intellectual property rights," CORE Discussion Papers RP -1597, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. de Rassenfosse, Gaétan & van Pottelsberghe de la Potterie, Bruno, 2010. "The role of fees in patent systems: Theory and evidence," CEPR Discussion Papers 7879, C.E.P.R. Discussion Papers.
  8. James Bessen & Jennifer L. Ford & Michael J. Meurer, 2011. "The Private and Social Costs of Patent Trolls," Working Papers 1103, Research on Innovation.
  9. Cohen, Wesley M. & Goto, Akira & Nagata, Akiya & Nelson, Richard R. & Walsh, John P., 2002. "R&D spillovers, patents and the incentives to innovate in Japan and the United States," Research Policy, Elsevier, vol. 31(8-9), pages 1349-1367, December.
  10. Bronwyn H. Hall & Dietmar Harhoff, 2012. "Recent Research on the Economics of Patents," NBER Working Papers 17773, National Bureau of Economic Research, Inc.
  11. Alberto Di Minin & Mario Benassi, 2008. "Playing In Between: Patents’ Brokers In Markets For Technology," Working Papers 200802, Scuola Superiore Sant'Anna of Pisa, Istituto di Management.
  12. Ashish Arora & Robert P. Merges, 2004. "Specialized supply firms, property rights and firm boundaries," Industrial and Corporate Change, Oxford University Press, vol. 13(3), pages 451-475, June.
  13. Andrei Hagiu & David B. Yoffie, 2013. "The New Patent Intermediaries: Platforms, Defensive Aggregators, and Super-Aggregators," Journal of Economic Perspectives, American Economic Association, vol. 27(1), pages 45-66, Winter.
  14. repec:hal:journl:halshs-00177614 is not listed on IDEAS
  15. Edwin Mansfield, 1986. "Patents and Innovation: An Empirical Study," Management Science, INFORMS, vol. 32(2), pages 173-181, February.
  16. Murray, Fiona & Stern, Scott, 2007. "Do formal intellectual property rights hinder the free flow of scientific knowledge?: An empirical test of the anti-commons hypothesis," Journal of Economic Behavior & Organization, Elsevier, vol. 63(4), pages 648-687, August.
  17. repec:hal:cesptp:halshs-00177614 is not listed on IDEAS
  18. Tassey, Gregory, 2000. "Standardization in technology-based markets," Research Policy, Elsevier, vol. 29(4-5), pages 587-602, April.
  19. von Graevenitz, Georg & Wagner, Stefan & Harhoff, Dietmar, 2011. "How to measure patent thickets--A novel approach," Economics Letters, Elsevier, vol. 111(1), pages 6-9, April.
  20. Encaoua, David & Guellec, Dominique & Martinez, Catalina, 2006. "Patent systems for encouraging innovation: Lessons from economic analysis," Research Policy, Elsevier, vol. 35(9), pages 1423-1440, November.
  21. Berger, Florian & Blind, Knut & Thumm, Nikolaus, 2012. "Filing behaviour regarding essential patents in industry standards," Research Policy, Elsevier, vol. 41(1), pages 216-225.
  22. Josh Lerner & Jean Tirole, 2004. "Efficient Patent Pools," American Economic Review, American Economic Association, vol. 94(3), pages 691-711, June.
  23. Markus Reitzig & Joachim Henkel & Ferdinand Schneider, 2010. "Collateral damage for R&D manufacturers: how patent sharks operate in markets for technology," Industrial and Corporate Change, Oxford University Press, vol. 19(3), pages 947-967, June.
  24. Caillaud, Bernard & Duchêne, Anne, 2011. "Patent office in innovation policy: Nobody's perfect," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 242-252, March.
  25. Bekkers, Rudi & Bongard, René & Nuvolari, Alessandro, 2011. "An empirical study on the determinants of essential patent claims in compatibility standards," Research Policy, Elsevier, vol. 40(7), pages 1001-1015, September.
  26. Lemley, Mark A & Shapiro, Carl, 2007. "Patent Hold-Up and Royalty Stacking," Competition Policy Center, Working Paper Series qt8638s257, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
  27. Dominique Guellec & Catalina Martinez & Pluvia Zuniga, 2012. "Pre-emptive patenting: securing market exclusion and freedom of operation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 21(1), pages 1-29, October.
  28. Michele Boldrin & David K Levine, 2008. "Against Intellectual Monopoly," Levine's Bibliography 122247000000002371, UCLA Department of Economics.
  29. Sakakibara, Mariko & Branstetter, Lee, 2001. "Do Stronger Patents Induce More Innovation? Evidence from the 1988 Japanese Patent Law Reforms," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 77-100, Spring.
  30. Kortum, Samuel & Lerner, Josh, 1999. "What is behind the recent surge in patenting?1," Research Policy, Elsevier, vol. 28(1), pages 1-22, January.
  31. Michele Boldrin & David K. Levine, 2013. "The Case against Patents," Journal of Economic Perspectives, American Economic Association, vol. 27(1), pages 3-22, Winter.
  32. Carl Shapiro, 2010. "Injunctions, Hold-Up, and Patent Royalties-super-1," American Law and Economics Review, Oxford University Press, vol. 12(2), pages 509-557.
  33. Suzanne Scotchmer, 1991. "Standing on the Shoulders of Giants: Cumulative Research and the Patent Law," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 29-41, Winter.
  34. Alfonso Gambardella, 2005. "Patents and the division of innovative labor," Industrial and Corporate Change, Oxford University Press, vol. 14(6), pages 1223-1233, December.
  35. Josh Lerner, 2002. "Patent Protection and Innovation Over 150 Years," NBER Working Papers 8977, National Bureau of Economic Research, Inc.
  36. Steffen Brenner, 2009. "Optimal formation rules for patent pools," Economic Theory, Springer, vol. 40(3), pages 373-388, September.
  37. Pénin, Julien, 2012. "Strategic uses of patents in markets for technology: A story of fabless firms, brokers and trolls," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 633-641.
  38. James Bessen & Michael J. Meurer, 2008. "Do Patents Perform Like Property?," Working Papers 0801, Research on Innovation.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ulp:sbbeta:2014-02. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.