Optimal Patent Renewals

Francesca Cornelli and Mark Schankerman

STICERD - Economics of Industry Papers from Suntory and Toyota International Centres for Economics and Related Disciplines, LSE

Abstract: When firms have different R&D productivities, it may be welfare increasing to differentiate patent lives across inventions. The reason is that the uniform patent life provides excessive incentives to do R&D to the low productivity firms and insufficient incentives to high productivity firms. Such a differentiated scheme is implementable through renewal fees, which endogenously determine an optimal pattern of patent life-spans and show how it depends on key features of the economic environment, such as the degree of heterogeneity in R&D productivity across firms, the ability of patentees to appropriate the potentital rents generated by R&D and the learning process about the value of innovation. The potential welfare gains associated with optimal renewal schemes are illustrated through simulation analysis.

Keywords: Patents; renewal fees; R&D; welfare gains; productivity; firms. (search for similar items in EconPapers)
Date: 1996-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://sticerd.lse.ac.uk/dps/ei/ei13.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cep:stieip:13

Access Statistics for this paper

More papers in STICERD - Economics of Industry Papers from Suntory and Toyota International Centres for Economics and Related Disciplines, LSE
Bibliographic data for series maintained by ().