Knowledge disclosure as intellectual property rights protection

Carlos Ponce ()

Journal of Economic Behavior & Organization, 2011, vol. 80, issue 3, 418-434

Abstract: We consider the problem of an inventor who discloses knowledge under the threat of a rival who may patent a competing idea. Disclosure diminishes the probability that the rival has of receiving a patent (legal externality) but it also decreases the rival’s marginal R&D cost (knowledge externality). Our results reveal that: (i) when the knowledge externality is ‘large’ (‘small’) relative to the legal one, an increase (decrease) in the patentability standard leads to higher disclosure and promotes R&D and (ii) if subsequent research creates positive external effects, the patentability standard should be set to promote further disclosure and R&D in equilibrium. The impact on the equilibrium configuration of changes in market profits is also examined.

Keywords: Disclosure; Legal externality; Knowledge externality; Transfer effect; Threat effect; Patentability standard; Market premium (search for similar items in EconPapers)
JEL-codes: O32 O34 O38 (search for similar items in EconPapers)
Date: 2011
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Working Paper: Knowledge Disclosure as Intellectual Property Rights Protection (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:80:y:2011:i:3:p:418-434

DOI: 10.1016/j.jebo.2011.04.005

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