Patent policy, patent pools, and the accumulation of claims in sequential innovation

Gastón Llanes () and Stefano Trento ()

Economic Theory, 2012, vol. 50, issue 3, 703-725

Abstract: We present a dynamic model where the accumulation of patents generates an increasing number of claims on sequential innovation. We compare innovation activity under three regimes—patents, no-patents, and patent pools—and find that none of them can reach the first best. We find that the first best can be reached through a decentralized tax-subsidy mechanism, by which innovators receive a subsidy when they innovate, and are taxed with subsequent innovations. This finding implies that optimal transfers work in the exact opposite way as traditional patents. Finally, we consider patents of finite duration and determine the optimal patent length. Copyright Springer-Verlag 2012

Keywords: Sequential innovation; Patent policy; Patent pools; Anticommons; Double marginalization; Complementary monopoly; L13; O31; O34 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (24)

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Related works:
Working Paper: Patent Policy, Patent Pools, And The Accumulation Of Claims In Sequential Innovation (2015)
Working Paper: Patent Policy, Patent Pools, And The Accumulation Of Claims In Sequential Innovation (2010)
Working Paper: Patent policy, patent pools, and the accumulation of claims in sequential innovation (2009)
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DOI: 10.1007/s00199-010-0591-5

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