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Economics of Patents: An Overview, The

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Abstract

In this paper, we review the economic effects of intellectual property rights and specifically address the economics of the patent system. The production and dissemination of new knowledge is fraught with market failures because knowledge is a public good. Patents provide a second-best solution to the resulting appropriability problem. We review the main benefits and costs of the patent system, focusing on the role that patents play in providing incentives for innovation, in promoting the dissemination of knowledge, and in helping technology transfer and commercialization of new technology. From a more normative perspective, we address the questions of what the features of an optimal patent system are and whether the patent system is socially desirable. We examine the problem of the optimal length and scope of patent protection, both for the case of a single innovation and for the richer case of cumulative innovations. Finally, we review the issues related to how the patent system influences the market structure and research and development investments.

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  • Corinne Langinier & GianCarlo Moschini, 2002. "Economics of Patents: An Overview, The," Center for Agricultural and Rural Development (CARD) Publications 02-wp293, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  • Handle: RePEc:ias:cpaper:02-wp293
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    Cited by:

    1. GianCarlo Moschini, 2003. "Intellectual Property Rights and the World Trade Organization: Retrospect and Prospects," Center for Agricultural and Rural Development (CARD) Publications 03-wp334, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    2. Andrew Eckert & Corinne Langinier, 2014. "A Survey Of The Economics Of Patent Systems And Procedures," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 996-1015, December.
    3. Katrin Hussinger, 2006. "Is Silence Golden? Patents Versus Secrecy At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(8), pages 735-752.
    4. Héctor Salgado-Banda, 2005. "Entrepreneurship and Economic Growth: An Empirical Analysis," DEGIT Conference Papers c010_031, DEGIT, Dynamics, Economic Growth, and International Trade.
    5. 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).
    6. repec:wsi:jdexxx:v:12:y:2007:i:01:n:s1084946707000538 is not listed on IDEAS
    7. Emmanuelle Auriol & Sara Biancini & Rodrigo Paillacar, 2013. "Universal Intellectual Property Rights: Too Much of a Good Thing?," CESifo Working Paper Series 4292, CESifo Group Munich.
    8. Tonnerre, Antoine, 2017. "A Spatial Analysis of Innovation in Europe," MPRA Paper 80116, University Library of Munich, Germany.
    9. Michel Trommetter, 2010. "Flexibility in the implementation of intellectual property rights in agricultural biotechnology," European Journal of Law and Economics, Springer, vol. 30(3), pages 223-245, December.

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