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on Intellectual Property Rights |
| By: | Ullberg, Eskil (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | We are well familiar with the economic analysis of a patent system in terms of a temporary monopoly on products, benefitting from marginal process inventions, formulated under conditions of certain future demands. This article develops an experimental and dynamic microeconomic model useful for studying the patent system as a trade system, where patented technology is exchanged in organized competitive markets, under uncertain future demands. An economic system design is developed to study transparent prices of patents, dynamic gains from using a patent in multiple industries and the coordination of invention, intermediary and innovation activities using a linear contract on patents (fixed fee plus royalty on revenues). A trader is introduced together with inventor and innovator agents in order to multiply the value (use) of the technology. Three mechanism designs and two levels of presumption of validity of the underlying patent right are proposed. The analysis differs from previous work on patents, trade and economics in that the focus is on the competitive pricing of the rights themselves, using demand side bidding. An informal theory is outlined to price the dual values of a patent (investing and blocking). Based on this proposition tentative hypothesis are outlined for two initial experiments using the outlined economic system design. |
| Keywords: | patents; organized markets; trade; licensing; technology |
| JEL: | D02 D23 L14 L24 O32 O34 |
| Date: | 2010–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0239&r=ipr |
| By: | Ullberg, Eskil (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | The question of how prices on patents rights should be determined in impersonal exchanges is examined in a laboratory environment. Dynamic gains from such organized trade with public prices are recorded. The experiment introduces a competitive market with impersonal exchange mechanisms and prices in the traditionally hierarchical and personal exchange of patents. A tradable linear contract (fixed fee plus royalty)is investigated with three mechanism designs for demand-side bidding and two levels of presumed legal validity of the underlying patent. A “trader” can split contracts useful for multiple “industries,” creating dynamic gains, potentially increasing the use of technology in the economic system. Previous research on licensing has mostly been limited to one-dimensional auction mechanisms or static environments. The results indicate that agents appear to price the blocking value in the fixed fee and the investment value, net what is paid in fixed, in the royalty component, supporting a proposed theory of prices. Risks are thereby shifted from the invention to the consumer by means of this producer market, increasing the incentives for investment in invention, potentially resulting in a more competitive technology being developed and a more efficient economic system. The results give indications on proper integration of information and rules for mechanisms for organized market on patents with transparent prices. It also shows that intermediaries (traders) are critical to achieve dynamic gains from the system as are high presumed validity of patents. |
| Keywords: | patents; trade; licensing; intellectual property; experiments |
| JEL: | D02 D23 L14 L24 O32 O34 |
| Date: | 2010–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0230&r=ipr |
| By: | Ullberg, Eskil (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | The patent system makes organized markets in patents with transparent prices possible. Such prices are here investigated as “signals” for inventors and innovators alike ofv aluable “technology areas”, in an experimental study. They inform decisions of specialized “firms” on allocation of resources for invention given a search space of induced technology values. The traditional hierarchical model of coordinating invention and innovation in a vertically integrated firm is replaced by coordination of these activities among specialized firms through a market with prices. The experimental study builds on a study focusing on price mechanisms with exogenous technology values to a study of an economic environment with “endogenous” technology values. The results suggest that coordination clearly takes place but differs considerably between the institutions and patent validity tested (a 3 x 2 design). As with the price study, demand-side bidding in both dimensions of the linear contract appears to yield the broadest search scope, and thus the best chances for the allocation of resources for invention. Multiple end-states are observed, especially for institutions with less demand-side bidding, indicating imprecise price signals for institutions similar to today’s personal exchange. Coordination with prices appears to increase the dynamic gains of the patent system through price information to reduce or better inform about the risk in investments in new technology. |
| Keywords: | patents; intellectual property; trade; licensing; experiments |
| JEL: | D02 D23 L14 L24 O32 O34 |
| Date: | 2010–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0231&r=ipr |
| By: | Braunerhjelm, Pontus (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Parker, Simon (University of Western Ontario, London, ON, Canada.) |
| Abstract: | This article describes the academic contributions of the 2010 recipient of the Global Award for Entrepreneurship Research, Professor Josh Lerner of the Harvard Business School. Lerner’s empirical research on the inter-relationship between venture capital, innovation and entrepreneurship has greatly extended and improved our understanding of one of the major drivers of growth in modern economies. The first part of this article explains Lerner’s contributions as regards the structure and organization of the venture capital industry. Later, his most important publications on entrepreneurship, innovation and intellectual property rights are surveyed. Several aspects of Lerner’s policy-oriented work are then outlined, before the article closes with a brief conclusion. |
| Keywords: | Global Award; Venture capital; Patent; Entrepreneurship; Innovation |
| JEL: | G24 L26 O31 |
| Date: | 2010–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0233&r=ipr |
| By: | Tim Paul Thomes (School of Economics and Business Administration, Friedrich Schiller University Jena) |
| Abstract: | This paper presents a theory of vertically interrelated markets of identical fixed size under implementation of positive indirect network effects. By introducing two Salop circles, a two-sided market model is provided, where intermediaries of differentiated copyrights for intellectual property, like performing rights organizations or publishers, compete as oligopsonists for owners of the intellectual property and as oligopolists for the users of their blanket licenses. We demonstrate, that an increase in competition benefits either license users or copyright owners or harms both groups. Moreover, if license users gain from an increased market entry, the owners of the intellectual property have to incur losses and vice versa. |
| Keywords: | Vertical restraints, Indirect network effects, Copyright enforcement, Performing rights organizations, Music industry |
| JEL: | D43 L13 L44 L82 |
| Date: | 2010–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-056&r=ipr |
| By: | Marianne Paasi |
| Abstract: | The paper analyses the European Research Area policy (ERA) from the innovation perspective. The Lisbon Treaty gives the Union the objective of free circulation of researchers, scientific knowledge and technology. The five ERA initiatives implement the ERA policy on the basis of voluntary cooperation. The ERA and innovation are linked through the business sector R&D investment. The economic value of the ERA comes from accelerated cross-European knowledge spillovers reducing the cost of inventing. In general, important obstacles hinder the knowledge spillovers making them largely intra-national. These obstacles arise due to the incentives in providing and sharing knowledge and to costs of capturing knowledge spillovers. Funding of knowledge from national budgets and uncertain benefits from knowledge circulation across the heterogenous member states complicates situation further. The analysis of Joint Programming and Better Careers and Mobility initiatives reveals multiple sources of obstacles to cross-European knowledge spillovers. Weak incentives in the member states and limited possibilities at the EU level block the implementation of ERA. In this constellation, the ERA initiatives need to support openness and competition in publicly funded research and universities as well as better models of scientific management to guarantee highest scientific quality. Accelerated (ERA) knowledge spillovers require extended and dynamic markets. |
| Keywords: | European Research Area (ERA), knowledge spillovers, innovation, incentives, voluntary cooperation |
| Date: | 2010–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2010/40&r=ipr |
| By: | Fjaestad, Maja (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology) |
| Abstract: | The organization of post-war science has taken distinctly different paths in different countries, based on historical rationales, national funding patterns and institutional structure. The German Max Planck-Society is a research-only network of basic research institutes whose organization and establishment relies heavily on the high valuation of basic research, as well as principles of separation of basic and applied science and ideals of independent research. The paper investigates the historical roots and organizational character of this scientific milieu. Also, the separation between the Max Planck-Society and the more industrially orientated Franuhofer institutes is discussed and problemized. One conclusions is that in spite distinctly different roles in the German research landscape, separating basic from applied research, the two organization both stresses their usefulness and contribution to the “common good” in official presentations. |
| Keywords: | Research institutes; basic research; applied research; Max Planck Society; Fraunhofer Society; Germany; Research policy |
| JEL: | O00 |
| Date: | 2010–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0232&r=ipr |