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Patents versus ex-post rewards : a new look

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Abstract

Studies that aim at comparing the patent system social efficiency versus an ex-post reward system rest on a traditional view of patents. They make the hypothesis that firms use the patent system only in order to be granted a short-term monopoly rent and therefore that patents lead to strong and steady monopolies. This assumption is convenient because it allows straightforward comparisons between patent and reward systems. But empirical studies do not confirm this vision of patents. Most firms do not consider patents as efficient devices to exploit commercial monopoly positions. Patents are rather perceived as strategic devices to signal firms' competences and to strengthen firms' bargaining power during negotiations prior to knowledge exchange and to R&D cooperation. These changes lead to rethink the framework of the patent-reward debate.

Suggested Citation

  • Julien Pénin, 2003. "Patents versus ex-post rewards : a new look," Cahiers de recherche du Département des sciences économiques, UQAM 20-19, Université du Québec à Montréal, Département des sciences économiques.
  • Handle: RePEc:cre:uqamwp:20-19
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    More about this item

    Keywords

    Patent; ex-post reward; R&D cooperation; cross-licensing; knowledge exchange;

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • L0 - Industrial Organization - - General
    • H0 - Public Economics - - General

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