|
on Intellectual Property Rights |
|
Issue of 2017‒05‒14
seven papers chosen by Giovanni Ramello Università degli Studi del Piemonte Orientale “Amedeo Avogadro” |
| By: | Serena Morricone (HEC Lausanne); Federico Munari (University of Bologna); Raffaele Oriani (LUISS Guido Carli); Gaetan de Rassenfosse (Ecole polytechnique federale de Lausanne) |
| Abstract: | This paper studies the interplay between two defining features of technology-based firms: licensing as a commercialization strategy and the reliance on equity financing. Within the context of an IPO, we argue that the technology commercialization strategy of a firm going public affects information asymmetries and, therefore, IPO underpricing. In particular, we theorize that underpricing will be higher when a firm’s technology commercialization strategy is more based on licenses. We also posit that the size of the patent portfolio will mitigate this effect. Our results from a sample of 130 IPOs in the U.S. Semiconductor industry confirm these predictions. |
| Keywords: | Initial public offering (IPO), Underpricing, License, Patent, Semiconductor |
| JEL: | G32 L24 L63 M13 O32 O34 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:iip:wpaper:4&r=ipr |
| By: | Hattori, Masahiko; Tanaka, Yasuhito |
| Abstract: | We consider a choice of options for an innovating firm in duopoly under vertical differentiation to enter the market with or without licensing its technology for producing a higher quality good to the incumbent firm using a combination of a royalty per output and a fixed license fee, or to license its technology without entry. With general distribution function of consumers' taste parameter and cost function we will show that when the innovating firm licenses its technology to the incumbent firm without entry, the optimal royalty rate per output is zero with negative fixed fee, and when the innovating firm enters the market with a license to the incumbent firm, its optimal royalty rate is positive with positive or negative fixed fee. Also we show that when cost function is concave, the optimal royalty rate is one such that the incumbent firm drops out of the market; and when cost function is strictly convex, there is an internal solution of the optimal royalty rate under duopoly. |
| Keywords: | duopoly, royalty, fixed license fee, vertical differentiation |
| JEL: | D43 L13 |
| Date: | 2017–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78856&r=ipr |
| By: | Hattori, Masahiko; Tanaka, Yasuhito |
| Abstract: | When an outside innovating firm has a technology to produce a higher quality good than the good produced at present, it can sell licenses of its technology to incumbent firms, or enter the market and at the same time sell licenses, or enter the market without license. We examine the definitions of license fee in such a situation in an oligopoly with three firms under vertical product differentiation, one outside innovating firm and two incumbent firms, considering threat by entry of the innovating firm using a two-step auction. We also present an example of the optimal strategy for the innovating firm under the assumption of uniform distribution of consumers' taste parameter and zero cost. Also we suppose that the innovating firm sells its licenses using a combination of royalty per output and a fixed license fee. |
| Keywords: | royalty, license fee; entry; oligopoly; vertical differentiation; two-step auction |
| JEL: | D43 L13 |
| Date: | 2017–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78859&r=ipr |
| By: | Hattori, Masahiko; Tanaka, Yasuhito |
| Abstract: | We extend the analysis of a possibility of negative royalty in licensing under oligopoly with an outside or an incumbent innovator by Liao and Sen (2005) to a case of oligopoly with vertical product differentiation under general distribution function of consumer' taste parameter and general cost functions. We consider both outside innovator case and incumbent innovator case. When the non-licensee does not drop out of the market; in the outside innovator case, if the goods of the firms are strategic substitutes (or complements), the optimal royalty rate is negative (or may be negative or positive); in the incumbent innovator case, if the goods are strategic substitutes (or complements), the optimal royalty rate may be negative or positive (is positive). When the non-licensee drops out of the market with negative royalty; in both cases, 1) If the goods are strategic substitutes, the optimal royalty rate is negative, 2) If the goods are strategic complements, the optimal royalty rate is positive. |
| Keywords: | negative royalty, vertical differentiation, general distribution and cost functions |
| JEL: | D43 L13 |
| Date: | 2017–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78857&r=ipr |
| By: | Hattori, Masahiko; Tanaka, Yasuhito |
| Abstract: | We consider a choice of options for an innovating firm to enter the market with or without licensing its new cost-reducing technology to the incumbent firm using a combination of a royalty per output and a fixed license fee, or to license its technology without entry. With general demand and cost functions we show the following results. When the innovating firm licenses its technology to the incumbent firm without entry, the optimal royalty rate per output for the innovating firm is zero with negative fixed fee, and when the innovating firm enters the market and at the same time licenses its technology to the incumbent firm, the optimal royalty rate is positive with positive or negative fixed fee. Also we show that when cost functions are concave, the optimal royalty rate is one such that the incumbent firm drops out of the market and license without entry strategy and entry with license strategy are optimal for the innovator; and when cost functions are strictly convex, there is an internal solution of the optimal royalty rate under duopoly and entry with license strategy is optimal for the innovator. |
| Keywords: | duopoly, royalty, fixed license fee |
| JEL: | D43 L13 |
| Date: | 2017–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78854&r=ipr |
| By: | Jacob Greenspon & Erika Rodigues |
| Abstract: | This report sheds light on trends in Canadian innovation as indicated through patenting. Central to these recent trends is an apparent paradox: the number of patents granted to Canadians, an output indicator of innovative activity, has increased substantially between 2000 and 2014 despite decreased business sector expenditures on research and development, a crucial input to innovation, in the same period. This report examines this issue an provides several potential explanations as to why this is the case, the strongest being that the divergence between trends in patenting and R&D expenditures is caused by greater efficiency of research processes and an increase in strategic filings of patents. Furthermore, this report documents recent trends in patenting activity in Canada from several sources and compares trends across different technologies. Patenting trends are also used to give a regional perspective on innovation by tracking the level of innovative activity occurring in provinces and census metropolitan areas. |
| Keywords: | Productivity, Patenting, Research and Development, Innovation, Trends, Technology, Measurement, Canada, |
| JEL: | O31 O32 Q55 D70 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:sls:resrep:1702&r=ipr |
| By: | Hattori, Masahiko; Tanaka, Yasuhito |
| Abstract: | When an outside innovating firm has a cost-reducing technology, it can sell licenses of its technology to incumbent firms, or enter the market and at the same time sell licenses, or enter the market without license. We examine the definitions of license fees in such situations under oligopoly with three firms, one outside innovating firm and two incumbent firms, considering threat by entry of the innovating firm using a two-step auction. Also we suppose that the innovating firm sells its licenses using a combination of royalty per output and a fixed license fee. |
| Keywords: | license; entry; oligopoly; innovating firm; two-step auction |
| JEL: | D43 L13 |
| Date: | 2017–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78858&r=ipr |