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Pool of Basic Patents and Follow-Up Innovations

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  • Langinier, Corinne

Abstract

Basic innovations are often fundamental to the development of applications that may be developed by other innovators. In this setting, we investigate whether patent pools can rectify the lack of incentives for developers to invest in applications. Following Green and Scotchmer (1995), we also wonder whether broad basic patents are necessary to provide enough incentives for basic innovators. We show that patent pools are more likely to be formed with patents of very different breadth, or patents of similarly wide breadth. Further, even though patent pools rectify the problem of developers’ incentives, they may reduce the incentive for doing basic research.

Suggested Citation

  • Langinier, Corinne, 2006. "Pool of Basic Patents and Follow-Up Innovations," Staff General Research Papers Archive 12647, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:12647
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    File URL: http://www2.econ.iastate.edu/papers/p3855-2006-07-19.pdf
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    References listed on IDEAS

    as
    1. Josh Lerner & Jean Tirole, 2004. "Efficient Patent Pools," American Economic Review, American Economic Association, pages 691-711.
    2. Carl Shapiro, 2001. "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting," NBER Chapters,in: Innovation Policy and the Economy, Volume 1, pages 119-150 National Bureau of Economic Research, Inc.
    3. Gilbert, Richard J. & Katz, Michael L., 2006. "Should good patents come in small packages? A welfare analysis of intellectual property bundling," International Journal of Industrial Organization, Elsevier, pages 931-952.
    4. Josh Lerner & Jean Tirole, 2004. "Efficient Patent Pools," American Economic Review, American Economic Association, pages 691-711.
    5. Merges, Robert P. & Nelson, Richard R., 1994. "On limiting or encouraging rivalry in technical progress: The effect of patent scope decisions," Journal of Economic Behavior & Organization, Elsevier, vol. 25(1), pages 1-24, September.
    6. Josh Lerner & Jean Tirole & Marcin Strojwas, 2003. "Cooperative Marketing Agreements Between Competitors: Evidence from Patent Pools," NBER Working Papers 9680, National Bureau of Economic Research, Inc.
    7. Ted O'Donoghue & Suzanne Scotchmer & Jacques-François Thisse, 1998. "Patent Breadth, Patent Life, and the Pace of Technological Progress," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(1), pages 1-32, March.
    8. Iain M. Cockburn & Samuel Kortum & Scott Stern, 2002. "Are All Patent Examiners Equal? The Impact of Examiner Characteristics," NBER Working Papers 8980, National Bureau of Economic Research, Inc.
    9. Bessen, James, 2004. "Holdup and licensing of cumulative innovations with private information," Economics Letters, Elsevier, vol. 82(3), pages 321-326, March.
    10. Adam B. Jaffe & Josh Lerner & Scott Stern, 2001. "Innovation Policy and the Economy, Volume 1," NBER Books, National Bureau of Economic Research, Inc, number jaff01-1.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    patent pool; innovation; breadth;

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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