How Broad Should the Scope of Patent Protection Be?

Paul Klemperer

RAND Journal of Economics, 1990, vol. 21, issue 1, 113-130

Abstract: I explore the trade-off between a patent's length (that is, its lifetime) and its width (that is, its scope of coverage). A wider patent generally reduces the distortion of consumers' choices between the patented brand of the product and unpatented, lower-priced varieties sold by competitors but also permits higher prices, which increase (relative to profits) the deadweight losses from consumers switching consumption out of the product class. I show under what conditions infinitely lived but very narrowly focused patents are the socially efficient way to reward innovation and under what conditions very short-lived but very broad patents are optimal.

Date: 1990
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