Patent Portfolio Race and Secrecy
When firms can protect their innovations by secrecy or lead-time, the additional effect of patent protection is not obvious. This paper shows that when firms compete for a single innovation, patent protection still increases R&D investment but decreases social welfare due to over-investment. However, when firms compete for multiple complementary patents (called a patent portfolio), patent protection decreases R&D investment and decreases social welfare due to under-investment. If firms cannot rely on secrecy, patent protection increases investment regardless of whether firms compete for a single patent or for a patent portfolio.
|Date of creation:||2008|
|Date of revision:|
|Contact details of provider:|| Postal: Department of Economics, BA 110 University at Albany State University of New York Albany, NY 12222 U.S.A.|
Phone: (518) 442-4735
Fax: (518) 442-4736
|Order Information:|| Postal: Department of Economics, BA 110 University at Albany State University of New York Albany, NY 12222 U.S.A.|
Web: http://www.albany.edu/economics/research/workingp/index.shtml Email:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Samuel Kortum & Josh Lerner, 1997.
"Stronger Protection or Technological Revolution: What is Behind the Recent Surge in Patenting?,"
NBER Working Papers
6204, National Bureau of Economic Research, Inc.
- Kortum, Samuel & Lerner, Josh, 1998. "Stronger protection or technological revolution: what is behind the recent surge in patenting?," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 48(1), pages 247-304, June.
- James Bessen & Robert M Hunt, 2004.
"An Empirical Look at Software Patents,"
Levine's Working Paper Archive
122247000000000167, David K. Levine.
- 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, 03.
- O'DONOGHUE, Ted & SCOTCHMER, Suzanne & THISSE, Jacques-François, . "Patent breadth, patent life, and the pace of technological progress," CORE Discussion Papers RP 1314, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- James Bessen & Eric Maskin, 2006.
"Sequential Innovation, Patents, and Imitation,"
Economics Working Papers
0025, Institute for Advanced Study, School of Social Science.
- Bessen, James, 2004. "Holdup and licensing of cumulative innovations with private information," Economics Letters, Elsevier, vol. 82(3), pages 321-326, March.
- Suzanne Scotchmer & Jerry Green, 1990. "Novelty and Disclosure in Patent Law," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 131-146, Spring.
- Edwin Mansfield, 1986. "Patents and Innovation: An Empirical Study," Management Science, INFORMS, vol. 32(2), pages 173-181, February.
- Glenn C. Loury, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, Oxford University Press, vol. 93(3), pages 395-410.
- Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3), pages 783-832.
- James J. Anton & Dennis A. Yao, 2004. "Little Patents and Big Secrets: Managing Intellectual Property," RAND Journal of Economics, The RAND Corporation, vol. 35(1), pages 1-22, Spring.
- Tom Lee & Louis L. Wilde, 1980. "Market Structure and Innovation: A Reformulation," The Quarterly Journal of Economics, Oxford University Press, vol. 94(2), pages 429-436.
- Suzanne Scotchmer, 1991. "Standing on the Shoulders of Giants: Cumulative Research and the Patent Law," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 29-41, Winter.
- Vincenzo Denicolo & Luigi Alberto Franzoni, 2004. "Patents, Secrets, and the First-Inventor Defense," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(3), pages 517-538, 09.
- Cabral, Luis, 1994. "Bias in market R&D portfolios," International Journal of Industrial Organization, Elsevier, vol. 12(4), pages 533-547, December.
- Mansfield, Edwin & Schwartz, Mark & Wagner, Samuel, 1981. "Imitation Costs and Patents: An Empirical Study," Economic Journal, Royal Economic Society, vol. 91(364), pages 907-18, December.
When requesting a correction, please mention this item's handle: RePEc:nya:albaec:08-05. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (John Bailey Jones)
If references are entirely missing, you can add them using this form.