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On the optimal patent policy


  • Tuomas Takalo

    (Department of Economic and FPPE, University of Helsinki, Finland)


Numerous attempts have been made to identify the optimal mix of patent breadth and patent life. Unfortunately, the range of contradictory results reported in literature is rather impressive. The aim of this note is to develop a very stylised model that encompasses a variety of different findings, and to derive a general rule for the optimal patent policy.

Suggested Citation

  • Tuomas Takalo, 2001. "On the optimal patent policy," Finnish Economic Papers, Finnish Economic Association, vol. 14(1), pages 33-40, Spring.
  • Handle: RePEc:fep:journl:v:14:y:2001:i:1:p:33-40

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    References listed on IDEAS

    1. Wright, Donald J., 1999. "Optimal patent breadth and length with costly imitation," International Journal of Industrial Organization, Elsevier, vol. 17(3), pages 419-436, April.
    2. Tuomas Takalo, 1998. "Innovation and imitation under imperfect patent protection," Journal of Economics, Springer, vol. 67(3), pages 229-241, October.
    3. Nancy T. Gallini, 1992. "Patent Policy and Costly Imitation," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 52-63, Spring.
    4. Richard Gilbert & Carl Shapiro, 1990. "Optimal Patent Length and Breadth," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 106-112, Spring.
    5. Tandon, Pankaj, 1982. "Optimal Patents with Compulsory Licensing," Journal of Political Economy, University of Chicago Press, vol. 90(3), pages 470-486, June.
    6. Carmen Matutes & Pierre Regibeau & Katharine Rockett, 1996. "Optimal Patent Design and the Diffusion of Innovations," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 60-83, Spring.
    7. Waterson, Michael, 1990. "The Economics of Product Patents," American Economic Review, American Economic Association, vol. 80(4), pages 860-869, September.
    8. Denicolo, Vincenzo, 1996. "Patent Races and Optimal Patent Breadth and Length," Journal of Industrial Economics, Wiley Blackwell, vol. 44(3), pages 249-265, September.
    9. Arundel, Anthony & Kabla, Isabelle, 1998. "What percentage of innovations are patented? empirical estimates for European firms," Research Policy, Elsevier, vol. 27(2), pages 127-141, June.
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    Cited by:

    1. Yuan, Michael Y., 2005. "Does decrease in copying cost support copyright term extension?," Information Economics and Policy, Elsevier, vol. 17(4), pages 471-494, October.
    2. Hussinger, Katrin & Grimpe, Christoph, 2007. "Firm Acquisitions and Technology Strategy: Corporate versus Private Equity Investors," ZEW Discussion Papers 07-066, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    3. Grönqvist, Charlotta, 2009. "Empirical studies on the private value of Finnish patents," Scientific Monographs, Bank of Finland, number 2009_041, November.
    4. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, March.
    5. Tatsuro Iwaisako & Koichi Futagami, 2013. "Patent protection, capital accumulation, and economic growth," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(2), pages 631-668, March.
    6. Khazabi, Massoud & Quyen, Nguyen, 2010. "The Search for New Drugs: A Theory of R&D in the Pharmaceutical Industry," MPRA Paper 39462, University Library of Munich, Germany.
    7. Frederik Schmidt, 2008. "Innovation contests with temporary and endogenous monopoly rents," Review of Economic Design, Springer;Society for Economic Design, vol. 12(3), pages 189-208, September.
    8. Julio R. Robledo, 2005. "Strategic patents and asymmetric litigation costs as entry deterrence instruments," Economics Bulletin, AccessEcon, vol. 15(2), pages 1-9.
    9. Michael Yuan, 2006. "A better copyright system? comparing welfare of indefinitely renewable copyright versus fixed-length copyright," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(6), pages 519-542.

    More about this item

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives


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