Choosing intellectual protection: imitation, patent strength and licensing

David Encaoua () and Yassine Lefouili ()
Additional contact information
Yassine Lefouili: Centre d'Economie de la Sorbonne, http://eurequa.univ-paris1.fr

Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1)

Abstract: This paper investigates the choice of an intellectual protection regime for a process innovation. We set up a multi-stage model in which choosing between patent and trade secrecy is affected by three parameters: the patent strength defined as the probability that the right is upheld by the court, the cost of imitating a patented innovation relative to the cost of imitating a secret innovation, and the innovation size defined as the extent of the cost reduction. The choice of the protection regime is the result of two effects: the damage effect evaluated under the unjust enrichment doctrine and the effect of market competition that occurs under the shadow of infringement. We find that large innovations are likely to be kept secret whereas small innovations are always patented. Furthermore, medium innovations are patented only when patent strength is sufficiently high. Finally, we investigate a class of licensing agreements used to settle patent disputes between patent holders and their competitors

Keywords: Patent; trade secrecy; imitation; licensing (search for similar items in EconPapers)
JEL-codes: D45 L10 O32 O34 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2005-12, Revised 2006-03
New Economics Papers: this item is included in nep-com, nep-ino, nep-mic and nep-tid
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Published in Annales d'Economie et de Statistique, INSEE-GENES, 2005, pp.241-271

Downloads: (external link)
https://halshs.archives-ouvertes.fr/halshs-00115666 (application/pdf)
https://doi.org/10.2307/20777577
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (https://doi.org/10.2307/20777577 [302 Found]--> https://www.jstor.org/stable/10.2307/20777577)

Related works:
Chapter: Choosing Intellectual Protection: Imitation, Patent Strength, and Licensing (2010)
Working Paper: Choosing Intellectual Protection: Imitation, Patent Strength and Licensing (2007)
Working Paper: Choosing Intellectual Protection: Imitation, Patent Strength and Licensing (2007)
Working Paper: Choosing Intellectual Protection: Imitation, Patent Strength and Licensing (2006)
Working Paper: Choosing intellectual protection: imitation, patent strength and licensing (2006)
Working Paper: Choosing Intellectual Protection: Imitation, Patent Strength and Licensing (2006)
Working Paper: Choosing intellectual protection: imitation, patent strength and licensing (2006)
Working Paper: Choosing Intellectual Protection: Imitation, Patent Strength and Licensing (2006)
Working Paper: Choosing Intellectual Protection: Imitation, Patent Strength and Licensing (2005)
Working Paper: Choosing Intellectual Protection: Imitation, Patent Strength and Licensing (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mse:wpsorb:v06039

Access Statistics for this paper

More papers in Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1) Contact information at EDIRC.
Bibliographic data for series maintained by Lucie Label ().