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Patent Height and Competition in Product Improvements

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  • van Dijk, Theon

Abstract

The stringency of novelty requirements that patent offices use in judging patentability defines the height of patent protection. The author studies patent height in a duopoly where firms compete in product improvements. A competitor who wants to invent around the other's patent is restricted by a minimum improvement level. The author shows that low patent protection does not affect market equilibrium without patent protection. A patent holder can lose with medium patent heights but not if patents provide high protection. The non patent holder can gain with medium heights but is increasingly worse off with higher patent protection. Copyright 1996 by Blackwell Publishing Ltd.

Suggested Citation

  • van Dijk, Theon, 1996. "Patent Height and Competition in Product Improvements," Journal of Industrial Economics, Wiley Blackwell, vol. 44(2), pages 151-167, June.
  • Handle: RePEc:bla:jindec:v:44:y:1996:i:2:p:151-67
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    Cited by:

    1. Langinier, Corinne, 2004. "Are patents strategic barriers to entry?," Journal of Economics and Business, Elsevier, vol. 56(5), pages 349-361.
    2. Yang, Xuebing, 2013. "Horizontal inventive step and international protection of intellectual property," International Review of Economics & Finance, Elsevier, vol. 25(C), pages 338-355.
    3. Liad Wagman & Vincent Conitzer, 2012. "Choosing fair lotteries to defeat the competition," International Journal of Game Theory, Springer;Game Theory Society, vol. 41(1), pages 91-129, February.
    4. repec:wsi:igtrxx:v:13:y:2011:i:02:n:s0219198911002952 is not listed on IDEAS
    5. repec:eee:ecolet:v:156:y:2017:i:c:p:88-91 is not listed on IDEAS
    6. Lambertini, Luca & Tampieri, Alessandro, 2012. "Low-quality leadership in a vertically differentiated duopoly with Cournot competition," Economics Letters, Elsevier, vol. 115(3), pages 396-398.
    7. Emanuele Bacchiega & Luca Lambertini & Andrea Mantovaini, 2011. "Process And Product Innovation In A Vertically Differentiated Industry," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 13(02), pages 209-221.
    8. L. Lambertini & C. Iori, 2000. "Joint Venture for Product Innovation and Cartel Stability under Vertical Differentiation," Working Papers 385, Dipartimento Scienze Economiche, Universita' di Bologna.
    9. Greenstein, Shane & Ramey, Garey, 1998. "Market structure, innovation and vertical product differentiation," International Journal of Industrial Organization, Elsevier, vol. 16(3), pages 285-311, May.
    10. Corinne Langinier, 2005. "Using patents to mislead rivals," Canadian Journal of Economics, Canadian Economics Association, vol. 38(2), pages 520-545, May.
    11. Eaton, Derek J.F. & van Tongeren, Frank W., 2005. "Should Europe Further Strengthen Intellectual Property for Plant Breeders? An Analysis of Seed Industry Proposals," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24725, European Association of Agricultural Economists.
    12. Chen, Yongmin & Pan, Shiyuan & Zhang, Tianle, 2014. "(When) Do stronger patents increase continual innovation?," Journal of Economic Behavior & Organization, Elsevier, vol. 98(C), pages 115-124.
    13. Zonglai Kou & Patrick Rey & Tong Wang, 2013. "Non-Obviousness and Screening," Journal of Industrial Economics, Wiley Blackwell, vol. 61(3), pages 700-732, September.
    14. Encaoua, David & Guellec, Dominique & Martinez, Catalina, 2006. "Patent systems for encouraging innovation: Lessons from economic analysis," Research Policy, Elsevier, vol. 35(9), pages 1423-1440, November.
    15. Grönqvist, Charlotta, 2009. "Empirical studies on the private value of Finnish patents," Scientific Monographs, Bank of Finland, number 2009_041, October.
    16. Zoltán J. Ács & Mark Sanders, 2015. "Patents, knowledge spillovers, and entrepreneurship," Chapters,in: Global Entrepreneurship, Institutions and Incentives, chapter 11, pages 195-212 Edward Elgar Publishing.
    17. Luca Lambertini & Piero Tedeschi, 2007. "On the Social Desirability of Patents for Sequential Innovations in a Vertically Differentiated Market," Journal of Economics, Springer, vol. 90(2), pages 193-214, March.
    18. van Dijk, Theon, 2000. "Licence contracts, future exchange clauses, and technological competition," European Economic Review, Elsevier, vol. 44(8), pages 1431-1448, August.
    19. Heger, Diana & Zaby, Alexandra K., 2013. "A look at both sides of the coin: Investigating the protective and the disclosure effect of patenting," ZEW Discussion Papers 13-048, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    20. David Encaoua & Dominique Guellec & Catalina Martínez, 2010. "Sistemas de patentes para fomentar la innovación: Lecciones de análisis económico," Working Papers 1015, Instituto de Políticas y Bienes Públicos (IPP), CSIC.
    21. repec:hal:journl:halshs-00743037 is not listed on IDEAS

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