Firm reputation and incentives to “milk” pending patents

Johannes Koenen () and Martin Peitz

International Journal of Industrial Organization, 2015, vol. 43, issue C, 18-29

Abstract: In this paper we develop a theory of patenting in which a firm preserves its reputation by only applying for a patent whenever a truly patentable idea has been generated. Firms have a short-run incentive to deviate and receive additional rents from unworthy pending patents, as well as potential rents from PTO mistakes in granting patents. We provide conditions for reputation to be preserved in equilibrium and analyze which market environments are favorable for such an equilibrium to exist. In particular, we analyze the merits of different patent systems.

Keywords: Pending patents; Reputation; Patent quality; Patent office policy (search for similar items in EconPapers)
JEL-codes: L15 L22 O34 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Firm Reputation and Incentives to "Milk" Pending Patents (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:43:y:2015:i:c:p:18-29

DOI: 10.1016/j.ijindorg.2015.08.002

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