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Media type:
E-Article
Title:
Dynamic Effects of Patent Policy on Sequential Innovation
Contributor:
Koo, Bonwoo;
Wright, Brian D.
Published:
Wiley, 2010
Published in:
Journal of Economics & Management Strategy, 19 (2010) 2, Seite 489-512
Language:
English
DOI:
10.1111/j.1530-9134.2010.00259.x
ISSN:
1058-6407;
1530-9134
Origination:
Footnote:
Description:
<jats:p> <jats:italic>When one patented innovation enables another, endogenous delay of the latter has important implications for the economics of patent life and scope, if licensing is negotiated ex post. Optimal patent life may be finite under competition, even if the royalty imposes no deadweight loss and there is no competitive dissipation of rent. Reduced scope of the first patent eliminates delay of costly enabled innovations, whether monopolized or competitive, and a combination of limited scope and infinite life can be optimal. If the second innovation is negotiated ex ante, its patentability can increase or decrease the first innovator's profit, depending on cost and market structure of the second innovation, and patent life</jats:italic>.</jats:p>