Sequential Innovations and Intellectual Property Rights
AbstractWe analyze a two-stage patent race. In the first phase firms seek to develop a research tool, an innovation that has no commercial value but is necessary to enter the second phase of the race. The firm that completes the second phase of the race first obtains a patent on the final innnovation and enjoys its profits. We ask whether patent protection for the innovator of the research tool is beneficial from the ex ante point of view. We show that there is a range of values of the final innovation such that firms prefer to have no Intellectual Property Rights for research tools.
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Bibliographic InfoPaper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 864.
Length: 18 pages
Date of creation: 2008
Date of revision:
Sequential Patent Race ; Intellectual Property Rights ; Knowledge Sharing;
Find related papers by JEL classification:
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
- L00 - Industrial Organization - - General - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-09-20 (All new papers)
- NEP-COM-2008-09-20 (Industrial Competition)
- NEP-INO-2008-09-20 (Innovation)
- NEP-IPR-2008-09-20 (Intellectual Property Rights)
- NEP-KNM-2008-09-20 (Knowledge Management & Knowledge Economy)
- NEP-MIC-2008-09-20 (Microeconomics)
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