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Strategic Patent Breadth For Drastic Product Innovations

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  • Yiannaka, Amalia
  • Fulton, Murray E.

Abstract

The paper models the patenting behavior of the innovator/patent applicant who having invented a drastic product innovation decides on the optimal breadth of protection claimed. The patenting process is modeled as a sequential game of complete information. The patentee acts strategically and with foresight. He chooses the breadth of protection that induces the desired behavior by his opponents and he incorporates transaction costs that may have to be incurred to enforce his patent rights. Our results suggest that contrary to what is traditionally assumed it is not generally optimal for the patentee to claim the broadest protection possible.

Suggested Citation

  • Yiannaka, Amalia & Fulton, Murray E., 2001. "Strategic Patent Breadth For Drastic Product Innovations," 2001 Annual meeting, August 5-8, Chicago, IL 20500, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea01:20500
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    File URL: http://purl.umn.edu/20500
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    References listed on IDEAS

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    1. Lanjouw, Jean O & Schankerman, Mark, 2001. "Characteristics of Patent Litigation: A Window on Competition," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 129-151, Spring.
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    5. Paul Klemperer, 1990. "How Broad Should the Scope of Patent Protection Be?," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 113-130, Spring.
    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. Horstmann, Ignatius & MacDonald, Glenn M & Slivinski, Alan, 1985. "Patents as Information Transfer Mechanisms: To Patent or (Maybe) Not to Patent," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 837-858, October.
    8. Motta, Massimo, 1993. "Endogenous Quality Choice: Price vs. Quantity Competition," Journal of Industrial Economics, Wiley Blackwell, vol. 41(2), pages 113-131, June.
    9. Nancy T. Gallini, 1992. "Patent Policy and Costly Imitation," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 52-63, Spring.
    10. Suzanne Scotchmer, 1991. "Standing on the Shoulders of Giants: Cumulative Research and the Patent Law," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 29-41, Winter.
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