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Standing on the Shoulders of Giants: Cumulative Research and the Patent Law

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  • Suzanne Scotchmer

Abstract

Most innovators stand on the shoulders of giants, and never more so than in the current evolution of high technologies, where almost all technical progress builds on a foundation provided by earlier innovators. Most economics literature on patenting and patent races has looked at innovations in isolation, without focusing on the externalities or spillovers that early innovators confer on later innovators. But the cumulative nature of research poses problems for the optimal design of patent law that are not addressed by that perspective. The challenge is to reward early innovators fully for the technological foundation they provide to later innovators, but to reward later innovators adequately for their improvements and new products as well. This paper investigates the use of patent protection and cooperative agreements among firms to protect incentives for cumulative research.

Suggested Citation

  • 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.
  • Handle: RePEc:aea:jecper:v:5:y:1991:i:1:p:29-41
    Note: DOI: 10.1257/jep.5.1.29
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    References listed on IDEAS

    as
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    8. Wright, Brian Davern, 1983. "The Economics of Invention Incentives: Patents, Prizes, and Research Contracts," American Economic Review, American Economic Association, vol. 73(4), pages 691-707, September.
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    More about this item

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law

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