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Runner-up patents: is monopoly inevitable?

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  • Emeric Henry

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

Abstract

Exclusive patents sacrifice product competition to provide firms incentives to innovate. We characterize an alternative mechanism whereby later inventors are allowed to share the patent if they discover within a certain time period of the first inventor. These runner-up patents increase social welfare under very general conditions. Furthermore, we show that the time window during which later inventors can share the patent should become a new policy tool at the disposal of the designer. This instrument will be used in a socially optimal mix with the breadth and length of the patent and could allow sorting between more or less efficient firms.

Suggested Citation

  • Emeric Henry, 2010. "Runner-up patents: is monopoly inevitable?," SciencePo Working papers Main hal-01023778, HAL.
    • Handle: RePEc:hal:spmain:hal-01023778
    DOI: 10.1111/j.1467-9442.2010.01603.x
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-01023778
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    Cited by:

    1. Carl Shapiro, 2008. "Patent Reform: Aligning Reward and Contribution," NBER Chapters, in: Innovation Policy and the Economy, Volume 8, pages 111-156, National Bureau of Economic Research, Inc.
    2. Emeric Henry, 2010. "Promising the right prize," Working Papers hal-00972957, HAL.
    3. Billette de Villemeur, Etienne & Ruble, Richard & Versaevel, Bruno, 2019. "Dynamic competition and intellectual property rights in a model of product development," Journal of Economic Dynamics and Control, Elsevier, vol. 100(C), pages 270-296.

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