Safe harbors for patent infringers: sequential innovation under incomplete patent protection

Alexandra Zaby

VfS Annual Conference 2020 (Virtual Conference): Gender Economics from Verein für Socialpolitik / German Economic Association

Abstract: From the viewpoint of an innovator a patent is a tradeoff between the right to exclude others from using the patented matter versus the requirement to disclose it. Given the sequential nature of many innovations, patent induced technology diffusion can spur technological progress. However, second innovators face the risk of being sued for infringement of the original patent. Incomplete patent protection reduces the risk of such infringement: either a narrow 'leading breadth' of the patent or the intentional containment of patent protection by a "research use" or "Bolar exemption" provide "safe harbors" for second innovators. This paper investigates how incomplete patent protection affects the propensity to patent of the initial inventor on the one hand and overall innovation incentives on the other hand. We find that incomplete patent protection can positively affect overall innovation incentives while maintaining the advantageousness of patent protection over secrecy. However, if second innovators face a very low risk of being punished for patent infringement, the propensity to patent decreases.

Keywords: sequential innovation; research use exemption; patenting decision; patent race; incomplete patent protection (search for similar items in EconPapers)
JEL-codes: D21 L24 O24 O31 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-ino and nep-ipr
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/224653/1/vfs-2020-pid-40577.pdf (application/pdf)

Related works:
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:zbw:vfsc20:224653

Access Statistics for this paper

More papers in VfS Annual Conference 2020 (Virtual Conference): Gender Economics from Verein für Socialpolitik / German Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics (econstor@zbw-workspace.eu).