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Of Patents and Property

Author

Listed:
  • James Bessen

    () (Research on Innovation, Boston University School of Law)

  • Michael J. Meurer

    () (Boston University School of Law)

Abstract

Do patents behave substantially like property rights in tangible assets, in that they encourage development and innovation? This article notes that historical evidence, cross-country evidence, economic experiments, and estimates of net benefits all indicate that general property rights institutions have a substantial direct effect on economic growth. Conversely, with a few important exceptions like chemicals and pharmaceuticals, empirical evidence indicates that intellectual property rights have at best only a weak and indirect effect on economic growth. Further, it appears that for public firms in most industries today, patents may actually discourage investment in innovation for fear of winding up on the losing side of a patent fight, and routine injunctive relief from patent protection may contribute to this problem.

Suggested Citation

  • James Bessen & Michael J. Meurer, 2009. "Of Patents and Property," Working Papers 0901, Research on Innovation.
  • Handle: RePEc:roi:wpaper:0901
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    File URL: http://www.ssrn.com/abstract=1341201
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    Cited by:

    1. Giovanni Ramello, 2011. "Property rights and externalities: the uneasy case of knowledge," European Journal of Law and Economics, Springer, vol. 31(1), pages 123-141, February.

    More about this item

    Keywords

    property; intellectual property; property rights; patent; property law; patent law; Industrial Revolution; economic growth; natural economic experiments; Eastern European economies; Eastern European transition; free-riders; generic drug;

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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