A Patent System for Both Diffusion and Exclusion
Public policy analysis of optimal patent regimes is often framed as a tradeoff between static and dynamic efficiency. In this analytical framework, weak patent protection and strict antitrust policy are taken to be directed toward static concerns, while protection of intellectual property through strong patent laws is taken as a reflection of broader social concerns for long-run growth and technological progress. This characterization has some truth, but the magnitude of the conflict between static and dynamic efficiency, can easily be exaggerated. In this article, I want to argue that weak patent protection need not be inimical to economic growth and, conversely, that strong patent protection need not be an enemy of diffusion. Appropriately structured patent law and antitrust rules can together ensure incentives for R&D and also induce cooperation among firms in diffusing R&D results through licensing and other means. At the same time, cooperation among firms at the R&D stage can counterbalance weak patent protection by internalizing spillovers from ongoing R&D programs, and such cooperation may also produce additional spillovers from the existing knowledge.
Volume (Year): 5 (1991)
Issue (Month): 1 (Winter)
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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.:
- Katz, Michael L & Shapiro, Carl, 1986. "How to License Intangible Property," The Quarterly Journal of Economics, MIT Press, vol. 101(3), pages 567-89, August.
- Suzanne Scotchmer & Jerry Green, 1990. "Novelty and Disclosure in Patent Law," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 131-146, Spring.
- Ordover, Janusz A. & Baumol, William J., 1988.
"Antitrust Policy And High-Technology Industries,"
88-25, C.V. Starr Center for Applied Economics, New York University.
- Grossman, Gene M & Shapiro, Carl, 1986. "Research Joint Ventures: An Antitrust Analysis," Journal of Law, Economics and Organization, Oxford University Press, vol. 2(2), pages 315-37, Fall.
- Ordover, Janusz A & Willig, Robert D, 1985. "Antitrust for High-Technology Industries: Assessing Research Joint Ventures and Mergers," Journal of Law and Economics, University of Chicago Press, vol. 28(2), pages 311-33, May.
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