Patent licensing and research exemption

Dusanee Kesavayuth

Economics Bulletin, 2009, vol. 29, issue 2, 944-956

Abstract: Within an environment of sequential innovations, real world evidence suggests that the licensing decision of the initial patent can occur either before or after the R&D investment of the follow-on invention. The possibility of licensing after the follow-on invention exists due to the presence of research exemption. This paper examines how the research exemption influences the licensor''s decision to license prior to the discovery of the follow-on invention. Within a three firm setting, the paper reveals that the research exemption does not alter the licensing decision while promoting a stream of future inventions. This provides an argument in support of research exemption as legal scheme.

Keywords: patent; licensing; research exemption (search for similar items in EconPapers)
JEL-codes: L0 L5 (search for similar items in EconPapers)
Date: 2009-05-12
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