A Theory of Patent Portfolios

Jay Choi and Heiko Gerlach

American Economic Journal: Microeconomics, 2017, vol. 9, issue 1, 315-51

Abstract: This paper develops a theory of patent portfolios in which firms accumulate an enormous amount of related patents, which makes it impractical to develop new products that avoid inadvertent infringement. We show that patent peace arises if product market competition is weak and patent portfolios are either sufficiently weak or sufficiently strong with comparable size. An increase in one firm's patent portfolio reduces the innovation incentives of its rivals but does not necessarily increase its own. Firms with larger patent portfolios have stronger incentives to acquire additional patents, while consumers may be better off if firms with weaker portfolios acquire them.

JEL-codes: D43 K11 L13 O34 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/mic.20150003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
https://www.aeaweb.org/articles?id=10.1257/mic.20150003 (application/pdf)
https://www.aeaweb.org/articles/attachments?retrie ... pAp0VL8aitNZLbSyVjnP (application/zip)

Related works:
Working Paper: A Theory of Patent Portfolios (2013)
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:aea:aejmic:v:9:y:2017:i:1:p:315-51

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Journal: Microeconomics is currently edited by Johannes Hörner

More articles in American Economic Journal: Microeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().