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Patent licensing and research exemption

Author

Listed:
  • Dusanee Kesavayuth

    (Department of Economics, University of Essex)

Abstract

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
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I2-P43.pdf
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    References listed on IDEAS

    as
    1. James Bessen & Eric Maskin, 2006. "Sequential Innovation, Patents, and Innovation," NajEcon Working Paper Reviews 321307000000000021, www.najecon.org.
    2. Suzanne Scotchmer, 1996. "Protecting Early Innovators: Should Second-Generation Products Be Patentable?," RAND Journal of Economics, The RAND Corporation, vol. 27(2), pages 322-331, Summer.
    3. Aoki, Reiko & Nagaoka, Sadao, 2006. "Economics of Research Exemption," Working Papers 202, Department of Economics, The University of Auckland.
    4. James Bessen & Eric Maskin, 2009. "Sequential innovation, patents, and imitation," RAND Journal of Economics, RAND Corporation, vol. 40(4), pages 611-635, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    patent; licensing; research exemption;
    All these keywords.

    JEL classification:

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

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