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Patent licensing and research exemption


  • Dusanee Kesavayuth

    () (Department of Economics, University of Essex)


Within an environment of sequential innovations, real world evidence suggests that the licensing decision of the initial patent can occur either before or after the R&D investment of the follow-on invention. The possibility of licensing after the follow-on invention exists due to the presence of research exemption. This paper examines how the research exemption influences the licensor''s decision to license prior to the discovery of the follow-on invention. Within a three firm setting, the paper reveals that the research exemption does not alter the licensing decision while promoting a stream of future inventions. This provides an argument in support of research exemption as legal scheme.

Suggested Citation

  • Dusanee Kesavayuth, 2009. "Patent licensing and research exemption," Economics Bulletin, AccessEcon, vol. 29(2), pages 944-956.
  • Handle: RePEc:ebl:ecbull:eb-09-00089

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    References listed on IDEAS

    1. Aoki, Reiko & Nagaoka, Sadao, 2006. "Economics of Research Exemption," Working Papers 202, Department of Economics, The University of Auckland.
    2. James Bessen & Eric Maskin, 2009. "Sequential innovation, patents, and imitation," RAND Journal of Economics, RAND Corporation, vol. 40(4), pages 611-635.
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    More about this item


    patent; licensing; research exemption;

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L0 - Industrial Organization - - General


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