Stricter patent regime, scientist mobility and innovation

Madhuparna Ganguly ()
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Madhuparna Ganguly: Indira Gandhi Institute of Development Research

Indira Gandhi Institute of Development Research, Mumbai Working Papers from Indira Gandhi Institute of Development Research, Mumbai, India

Abstract: We model a patent regime in which an innovating firm can partially recover its damage due to scientist movement from the infringing rival. The strength of the patent system, which is a function of litigation success probability and recovery proportion, stipulates expected indemnification. We show that stronger patents fail to reduce the likelihood of infringement and further, decrease the innovation's expected profitability. Higher potential reparation also reduces the scientist's expected return on R&D knowledge, entailing greater R&D investment. The expected effects manifest when the market for the new product is moderately competitive. Our results suggest important considerations for patent reforms.

Keywords: Competition intensity; Damage rules; Patent strength; Scientist mobility (search for similar items in EconPapers)
JEL-codes: J60 K40 L11 L13 O34 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2020-11
New Economics Papers: this item is included in nep-bec, nep-com, nep-ind, nep-ino and nep-ipr
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