Patents As Negotiating Assets: Patenting Versus Secrecy For Startups

Andreas Panagopoulos () and In-Uck Park

Economic Journal, 2018, vol. 128, issue 615, 2876-2894

Abstract: We analyse a sequential innovation model and show that relatively narrow patent rights can facilitate a market in which startups’ patents are traded as negotiating assets. In this market, the trade of patents, on top of monopoly profits, conveys an extra surplus from the patents’ capacity to affect future tech‐transfer negotiations. This surplus, which stems from a patent's potential ability to exclude infringers and the corresponding enforcement spillovers that patents confer, may incentivise innovations that would not have been possible under trade secrecy, improving social welfare.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:wly:econjl:v:128:y:2018:i:615:p:2876-2894

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