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Do broad patents deter research cooperation ?

Author

Listed:
  • Trommetter, M.
  • Tropéano, J.P.

Abstract

The authors develop a theoretical model where two competing firms need access to basic knowledge that only one firm owns. They determine the impact of an imperfect property right on the incentive to transfer that knowledge to the competitor. They compare these transfer strategies. (i) Patenting may lead to litigation costs that depend on the competition toughness. (ii) Keeping the knowledge secret involves no licence revenue but ensures a monopoly profit. (iii) The firm can also coooperate with the competitor and thereby avoids litigation. They show that whenever competition between both firms is low, making patentable basic knowledge promotes knowledge transfer through research cooperation.

Suggested Citation

  • Trommetter, M. & Tropéano, J.P., 2009. "Do broad patents deter research cooperation ?," Working Papers 200904, Grenoble Applied Economics Laboratory (GAEL).
  • Handle: RePEc:gbl:wpaper:200904
    as

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    File URL: https://gael.univ-grenoble-alpes.fr/sites/gael/files/doc-recherche/WP/A2009/gael2009-07.pdf
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    References listed on IDEAS

    as
    1. Llobet, Gerard, 2003. "Patent litigation when innovation is cumulative," International Journal of Industrial Organization, Elsevier, vol. 21(8), pages 1135-1157, October.
    2. Trommetter, Michel, 2005. "Biodiversity and international stakes: A question of access," Ecological Economics, Elsevier, vol. 53(4), pages 573-583, June.
    3. Klaus Kultti & Tuomas Takalo & Juuso Toikka, 2007. "Secrecy versus patenting," RAND Journal of Economics, RAND Corporation, vol. 38(1), pages 22-42, March.
    4. Sudipto Bhattacharya & Sergei Guriev, 2006. "Patents vs. Trade Secrets: Knowledge Licensing and Spillover," Journal of the European Economic Association, MIT Press, vol. 4(6), pages 1112-1147, December.
    5. Joseph Farrell & Carl Shapiro, 2008. "How Strong Are Weak Patents?," American Economic Review, American Economic Association, vol. 98(4), pages 1347-1369, September.
    6. Claude d'Aspremont & Sudipto Bhattacharya & Louis-Andre Gerard-Varet, 2000. "Bargaining and Sharing Innovative Knowledge," Review of Economic Studies, Oxford University Press, vol. 67(2), pages 255-271.
    7. Trommetter, M., 2008. "Intellectual property rights in agricultural and agro-food biotechnologies to 2030 (© OECD International Futures Programme)," Working Papers 200805, Grenoble Applied Economics Laboratory (GAEL).
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    INNOVATION; SECRET; PATENT; cooperation; KNOWLEDGE SHARING;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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