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on Intellectual Property Rights |
| By: | Nicholas Economides (Stern School of Business, New York University); William N. Hebert (Calvo & Clark LLP); |
| Abstract: | We examine the intersection of patents and antitrust where a patent holder uses the monopoly power it possesses in the market for a patented product to exclude competitors in an adjacent market and attempt to monopolize or monopolize the adjacent market. The present scheme for awarding patents cannot judge when the issuance of a patent will lead to the appropriate balance between innovation and efficiency. Where a patent holder’s invention uses an interface with adjacent products, the patent holder may be tempted to extend its patent monopoly into adjacent markets that depend upon the interface with the patented invention. Economic theory suggests that it is inappropriate to immunize a patent holder from antitrust liability when it attempts to extend its patent monopoly into adjacent markets, because it could decrease consumer surplus. Courts have expressed their reluctance to scrutinize a patent holder’s innovations and design changes, because of the potential benefits of the innovations and their reluctance to second-guess the marketplace. However, applying traditional antitrust principles, courts have found that monopolists could be liable for unlawfully extending their monopoly positions into adjacent markets in the areas of computer peripherals and software applications; aftermarkets for replacement parts, service and maintenance of durable goods; design changes to medical devices; and changes in drug formulas. While the patent laws provide a spur to innovation by granting limited monopoly rights, the antitrust laws curb the excessive reach of these monopoly rights by acting as a check on excessive expansion of the scope of the patent grant. |
| Keywords: | patents, antitrust, adjacent markets, complementarity, innovation, efficiency, aftermarkets |
| JEL: | K21 Q31 Q34 L42 L40 L12 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:net:wpaper:0707&r=ipr |
| By: | Kilponen , Juha (Bank of Finland Research); Santavirta, Torsten (Helsinki School of Economics) |
| Abstract: | We show theoretically that a proportional R&D subsidy accelerates innovation activity at all degrees of competition in the modern Schumpeterian growth model, but less so at high degrees of competition. We then use company-level data on patenting activity, product market competition and R&D subsidies of Finnish firms during 1990–2001 to test the theoretical prediction. The empirical findings can be summarized as follows. Firstly, we find relatively strong evidence in favour of the inverted U-shape between competition and innovation. Secondly, we find some evidence that a direct R&D subsidy increases innovative activity at all but very high degrees of competition. This can be interpreted so mean that the R&D subsidy reinforces the Schumpeterian effect due to the negative cross-effect of R&D subsidy and competition. This is evident from the finding that an increase in the R&D subsidy steepens the inverted U relationship when competition is fierce. |
| Keywords: | competition; innovation; R&D subsidies; patents |
| JEL: | D40 H25 L10 O31 |
| Date: | 2007–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2007_010&r=ipr |
| By: | Stanley Watt |
| Abstract: | In weak intellectual property rights (IPR) environments, the imitation of proprietary technology by domestic firms has become a deterrent for foreign investment. Different multinationals may view this deterrent differently. This paper develops a model where firms with more technology are less likely to invest in weak IPR environments. If imitation is costly, the model predicts that multinationals with the lowest level and highest level of technology will invest in weak IPR environments, and multinationals with a moderate level of technology will invest only in strong IPR environments. Empirical analysis with firm level data is consistent with this non-monotonicity result. |
| Date: | 2007–07–17 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/161&r=ipr |
| By: | Holger Graf (Friedrich-Schiller University Jena, School of Business and Economics) |
| Abstract: | The internal density of a local network is said to increase the region-specific knowledge-stock and might lead to a comparative advantage. However, it might also lead to a lock-in situation, if local trajectories are directed towards inferior solutions. Accordingly it is argued that successful clusters are characterised by the existence of gatekeepers, i.e. actors that generate novelty by drawing on local and external knowledge. We attempt to answer questions related to the role and characteristics of gatekeepers within regional innovation systems by applying social network analysis based on patent data for four East-German regions. The regional networks appear to be significantly different with respect to the overall degree of interaction and with respect to their relative outward orienta- tion. Concerning the characteristics of gatekeepers, we find that size does not play the major role for being a gatekeeper. It is rather absorptive capacity that matters for gatekeepers. It also shows that public research organisations serve the functions of a gatekeeper to a higher degree than private actors. |
| Keywords: | Innovator networks; Gatekeeper; R+D co-operation; Scientist mobility |
| JEL: | O31 Z13 R11 |
| Date: | 2007–09–10 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-054&r=ipr |
| By: | Hattori, Keisuke |
| Abstract: | This paper investigates the welfare effects of international transfers of environmental technologies in open economies with international oligopoly and transboundary pollution, and shows that policy differentiation between the donor and the recipient countries and/or product differentiation between the donor and the recipient firms play a critical role in obtaining bilateral agreement on the transfer policy. The results come from the fact that the policy differentiation weakens the strategic relationships in environmental policy setting between governments and that the product differentiation weakens the strategic relationships in quantity choices between firms. |
| Keywords: | Technology Transfer; Environmental Tax; Oligopoly; Product Differentiation |
| JEL: | Q56 |
| Date: | 2007–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4777&r=ipr |
| By: | Olivier BROSSARD (LEREPS-GRES); Jérôme VICENTE (LEREPS-GRES) |
| Abstract: | This paper deals with the firms’ motives for entering into knowledge partnerships. We start by showing that networking strategies are designed to access external knowledge whilst maintaining at the same time a sufficient level of knowledge appropriation and tradability. The ICT sector (and interplaying ones) is particularly concerned by this accessibility/appropriation trade-off. The questions of modularity, complementarity, compatibility and standardisation are critical in the formation of corporate strategic and technological partnerships. Considering that knowledge in this sector is complex and systemic, we construct a theoretical typology of knowledge partnerships by crossing the levels of cognitive and relational proximity with the knowledge phases of exploration, examination and exploitation. This typology is then tested on empirical data through the use of a classification algorithm. The dataset is based on a sample of strategic alliances in the European ICT sector extracted from SDC Platinum. We show that strategic alliances are clustered in relation to the knowledge phases (exploration, examination, exploitation), and that the alliance categories are characterised by levels of relational and cognitive distance which actually are in keeping with the theoretical predictions. |
| Keywords: | knowledge networks; knowledge phases; proximities; strategic alliances; ICT sector |
| JEL: | L22 L24 L63 O31 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:grs:wpegrs:2007-18&r=ipr |
| By: | Iacopo Grassi (Università Federico II) |
| Abstract: | Internet, mp3 files, peer-to-peer software and digital technologies for copying have radically modified the music sector. In this paper I present a theoretical model, that investigates the consequences of the appearance of a pirate low quality good (typically a mp3 file) in the music market. In this paper I propose a model of sampling, consider the possibility that the firm modifies its business entering into the low quality segment and investigate the supposed conflict between the recording company, whose profit depends on the CD sold, and the artist, whose profits depend in part on the live performance, the demand of which can increase for the positive externality due to the illegal download of music. |
| Keywords: | File-sharing, Copyright, Sample Effect, Mp3, Concert |
| JEL: | L86 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2007.80&r=ipr |