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Competitive disadvantage through non-existing software patents

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  • Pia Weiss

    (Chemnitz University of Technology)

Abstract

In a model of sequential patent races, it is examined whether or not introducing a patent law in the home country is beneficial to the firms and the society as a whole given the foreign country already offers patent protection. Before the first patent race starts, the firms and the foreign country share interests. For a given total number of firms, the welfare effect depends on the relative competition profit. For medium values of the latter, the foreign country as well as the firms gain and the home country loses by introducing the patent law. In a Cournot and a Bertand model with a homogeneous product, the home country will never benefit from the introduction of patent protection.

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File URL: http://128.118.178.162/eps/dev/papers/0402/0402006.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Development and Comp Systems with number 0402006.

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Date of creation: 18 Feb 2004
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Handle: RePEc:wpa:wuwpdc:0402006

Note: Type of Document - pdf; prepared on Linux; to print on Laser;
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Web page: http://128.118.178.162

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Keywords: Sequential patent races; patent law; competition policy;

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  1. James Bessen & Robert M. Hunt, 2004. "An empirical look at software patents," Working Papers 03-17, Federal Reserve Bank of Philadelphia.
  2. Robert M. Hunt, 1999. "Nonobviousness and the incentive to innovate: an economic analysis of intellectual property reform," Working Papers 99-3, Federal Reserve Bank of Philadelphia.
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