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Shared Patent Rights And Technological Progress

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  • Matthew Mitchell
  • Yuzhe Zhang

Abstract

We study how to reward innovators who build on one another. Rewards come in the form of patents. Because patent rights are scarce, the optimal allocation involves sharing: More than one innovator's patent is in force at a given time. We interpret such allocations as patents that infringe one another as licensing through an ever growing patent pool and as randomization through litigation. We contrast the rate of technological progress under the optimal allocation with the outcome if sharing is prohibitively costly. Avoiding sharing initially slows progress and leads to a more variable rate of technological progress.

Suggested Citation

  • Matthew Mitchell & Yuzhe Zhang, 2015. "Shared Patent Rights And Technological Progress," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(1), pages 95-132, February.
    • Handle: RePEc:wly:iecrev:v:56:y:2015:i:1:p:95-132
    DOI: 10.1111/iere.12096
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    References listed on IDEAS

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    Cited by:

    1. Denicolò, Vincenzo & Zanchettin, Piercarlo, 2022. "Patent protection for complex technologies," International Journal of Industrial Organization, Elsevier, vol. 81(C).

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