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Patents Hinder Collusion

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Author Info
Klaus Kultti (University of Helsinki)
Tuomas Takalo (University of Toulouse & Bank of Finland)
Juuso Toikka (Helsinki School of Economics)

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Abstract

We argue that a patent system makes collusion among innovators more difficult. Our simple argument is based on two properties of the patent system. First, a patent not only protects against infringement but also against retaliation by former collusion members. Second, a deviator has an equal chance with former collusion members to get a patent on new innovations. We show that if a patent system reduces spillovers, it renders collusion impossible. Moreover, it is possible to design a patent system that simultaneously increases knowledge spillovers and eliminates collusion

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File URL: http://129.3.20.41/eps/io/papers/0503/0503015.pdf
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Publisher Info
Paper provided by EconWPA in its series Industrial Organization with number 0503015.

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Length: 27 pages
Date of creation: 31 Mar 2005
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Handle: RePEc:wpa:wuwpio:0503015

Note: Type of Document - pdf; pages: 27
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Related research
Keywords: Patens; Collusion; Secrecy; Innovation;

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L - Industrial Organization

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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.:
  1. Wolinsky, Asher, 1988. "Dynamic Markets with Competitive Bidding," Review of Economic Studies, Blackwell Publishing, vol. 55(1), pages 71-84, January. [Downloadable!] (restricted)
  2. Dam, Kenneth W, 1994. "The Economic Underpinnings of Patent Law," Journal of Legal Studies, University of Chicago Press, vol. 23(1), pages 247-71, January.
  3. Josh Lerner & Jean Tirole, 2004. "Efficient Patent Pools," American Economic Review, American Economic Association, vol. 94(3), pages 691-711, June. [Downloadable!]
    Other versions:
  4. Jerry R. Green & Suzanne Scotchmer, 1995. "On the Division of Profit in Sequential Innovation," RAND Journal of Economics, The RAND Corporation, vol. 26(1), pages 20-33, Spring. [Downloadable!] (restricted)
    Other versions:
  5. Carl Shapiro, 2001. "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting," NBER Chapters, in: Innovation Policy and the Economy, Volume 1, pages 119-150 National Bureau of Economic Research, Inc. [Downloadable!]
    Other versions:
  6. repec:rus:hseeco:72148 is not listed on IDEAS
  7. Dennis W. Carlton & Robert H. Gertner, 2002. "Intellectual Property, Antitrust and Strategic Behavior," NBER Working Papers 8976, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  8. Ted O'Donoghue & Suzanne Scotchmer & Jacques-François Thisse, 1998. "Patent Breadth, Patent Life, and the Pace of Technological Progress," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 7(1), pages 1-32, 03. [Downloadable!] (restricted)
  9. Lu, Xiaohua & McAfee, R. Preston, 1996. "The Evolutionary Stability of Auctions over Bargaining," Games and Economic Behavior, Elsevier, vol. 15(2), pages 228-254, August. [Downloadable!] (restricted)
  10. B. Douglas Bernheim & Michael D. Whinston, 1990. "Multimarket Contact and Collusive Behavior," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 1-26, Spring. [Downloadable!] (restricted)
  11. Kortum, Samuel & Lerner, Josh, 1999. "What is behind the recent surge in patenting?1," Research Policy, Elsevier, vol. 28(1), pages 1-22, January. [Downloadable!] (restricted)
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Cited by:
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  1. Klaus Kultti & Tuomas Takalo & Juuso Toikka, 2006. "Simultaneous Model of Innovation, Secrecy, and Patent Policy," American Economic Review, American Economic Association, vol. 96(2), pages 82-86, May. [Downloadable!]
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