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R&D, Licensing and Patent Protection

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  • Arijit Mukherjee

    (Keele University)

Abstract

This paper investigates the effect of different patent regimes on R&D investment and social welfare in a duopoly market with uncertain R&D process. We find that strong patent protection increases R&D investment of at least one firm but whether both firms’ R&D investment will be more under strong patent protection is ambiguous. While ex-ante welfare is more likely to be higher under strong patent protection, ex-post welfare may be higher under strong patent protection. Whether the possibility of licensing increases both firms' R&D investment is also ambiguous. Licensing with up-front fixed-fee can increase policy dilemma by increasing the possibility of higher ex-ante welfare under strong patent protection but higher ex-post welfare under weak patent protection. However, the results may be different for licensing contract with per- unit output royalty.

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File URL: http://128.118.178.162/eps/io/papers/0211/0211011.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Industrial Organization with number 0211011.

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Length: 34 pages
Date of creation: 05 Nov 2002
Date of revision:
Handle: RePEc:wpa:wuwpio:0211011

Note: Type of Document - pdf; prepared on pc; pages: 34
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Web page: http://128.118.178.162

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Keywords: Knowledge spillover; Licensing; Patent protection; Uncertain R&D;

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References

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