Property Rights and Invention

Abstract

Draft chapter 7 for Handbook of Economics and Technical Change, Bronwyn Hall and Nathan Rosenberg, Editors. This chapter was partially sponsored by "The Knowledge-Based Society", Research Council of Norway project 172603/V10. 1 A more complete description of the patent right, including its history, can be found in Scotchmer (2004), Guellec and van Pottelsberghe de la Potterie (2007), and Jaffe and Lerner (2006). 2 See Guellec and van Pottelsberghe (2007) and Jaffe and Lerner (2006) for more detailed discussion of the philosophical differences between European and US views of patents. For an argument for a constitutional underpinning of patent rights, see Nard and Morriss (2006). 11 See Anand and Khanna (2000) for observed license contract structure. 12 See Jaffe and Lerner (2006), especially pp. 82-94. 19 This may be done in order to obtain several chances at obtaining a valid national patent. As the EPO tends to produce feedback on the patentability of the innovation slowly compared to national offices or the US, this strategy also has the advantage of providing valuable early feedback to the applicant as to whether the application is worthwhile to pursue. Furthermore, as the USPTO allows more substantial changes to be introduced to the patent document after filing, it may make sense to file at the USPTO early and then file a better-crafted document at the EPO later. See Guellec and van Pottelsberghe (2007), p. 155-159, for patent filing routes. 20 Other possible outcomes, which differ between the US and Europe, include withdrawal or revision of the document. See Guellec and Van Pottelsberghe (2007) or Jaffe and Lerner (2006) for details. 21 See http://www.uspto.gov/web/offices/com/speeches/07-46.htm for example. From this press release, it is clear that there is considerable variance across years included in this figure. See also Harhoff and Wagner (2005). Ebert (2004), commenting on the role of patent continuations in the US system, obtains a somewhat lower adjusted rejection rate of ¼. 22 See Bessen and Meurer (2008a) for estimates. 23 Lerner (1995) estimates that cases begun in 1991 in the US would eventually total legal expenditures, in 1991 dollars, of about 27% of all of the basic research expenditure in the US in 1991. 24 See Lanjouw and Schankerman (2001), and Lemley (2001). In other words, about 95% of litigated patents settle out of court. 35 A simple example t keep in mind for later parts of the chapter could be strict enforcement of EU Article 82(a), which forbids "excessive pricing" by a dominant firm. 49 Empirical investigation raises the issue of simultaneity between research intensity and intellectual property protection. Studies controlling for this link (see Qian (2007)), however, continue to find relatively little evidence of a relation between strength of protection and investment activity. 50 In the earlier notation, if welfare equals d+s+π per period, as before, society obtains only s+π during the period of protection, but the entire welfare triangle after the patent expires.

Incentives for Innovation: Patents, Prizes, and Research Contracts

“…The economic benefits and costs of the patent institution have been the object of extensive research, too much for us to review in a comprehensive and systematic manner. The reader is referred to existing compendia, of varying detail, which include Langinier and Moschini (2002), Scotchmer (2004), and Rockett (2010). Instead, in this section we discuss some of the patent institution's key features and implications, with an emphasis on issues that remain unsettled.…”

Dynamic competition and intellectual property rights in a model of product development

“…In the case of legal protection, wider patents imply higher costs for inventing 2 0 Admittedly with either perfect competition or monopoly instead of duopoly, the timing of innovation follows a straightforward investment rule. As Rockett [22] observes, accordingly "most [models] take the identity of the innovator as given." Denicolò [5] is an exception, but his patent race model does not allow for attrition and secondmover advantage.…”

A Survey of the Economics of Patent Systems and Procedures

“…The purpose of this paper is to provide an overview of the recent and rapidly growing economic literature on these issues. The intent is to go beyond the traditional economic literature on patents that has mainly focused on the role of patents in encouraging invention and the disclosure of technology, and on the optimal design (in terms of length and scope) of patent rights (for surveys, see Mazzoleni and Nelson, 1998;Gallini, 2002;Langinier and Moschini, 2002;Scotchmer, 2004;Rockett, 2010;Hall and Harhoff, 2012). This traditional literature has largely ignored the internal working of patent offices, 5 and its impact on examiners, applicants and third parties.…”