Patents versus ex-post rewards: a new look

Julien Pénin ()

No 20-19, Cahiers de recherche du Département des sciences économiques, UQAM from Université du Québec à Montréal, Département des sciences économiques

Abstract: Studies that aim at comparing the patent system social efficiency versus an ex-post reward system rest on a traditional view of patents. They make the hypothesis that firms use the patent system only in order to be granted a short-term monopoly rent and therefore that patents lead to strong and steady monopolies. This assumption is convenient because it allows straightforward comparisons between patent and reward systems. But empirical studies do not confirm this vision of patents. Most firms do not consider patents as efficient devices to exploit commercial monopoly positions. Patents are rather perceived as strategic devices to signal firms' competences and to strengthen firms' bargaining power during negotiations prior to knowledge exchange and to R&D cooperation. These changes lead to rethink the framework of the patent-reward debate.

Keywords: Patent; ex-post reward; R&D cooperation; cross-licensing; knowledge exchange (search for similar items in EconPapers)
JEL-codes: D60 L0 H0 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ind
Date: Written 2003-06
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