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Using patents to mislead rivals

Author

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  • Corinne Langinier

Abstract

Firms claim they do not rely heavily on patents. Yet they patent, as indicated by the large number of patents that are granted. This paper offers a possible resolution to this puzzle. It takes a simplified version of a duopoly innovation race and studies the patenting decision of an innovator who has private information about the improvability of her innovation. It is shown that a firm may use the patenting decision to mislead her rival. Under symmetric information, research can be stimulated but not disclosed. However, under asymmetric information, disclosure is more likely, even though research incentive may be weakened.

Suggested Citation

  • Corinne Langinier, 2005. "Using patents to mislead rivals," Canadian Journal of Economics, Canadian Economics Association, vol. 38(2), pages 520-545, May.
    • Handle: RePEc:cje:issued:v:38:y:2005:i:2:p:520-545
    DOI: 10.1111/j.0008-4085.2005.00291.x
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    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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