Fences and competition in patent races

Cédric Schneider

MPRA Paper from University Library of Munich, Germany

Abstract: This paper studies the behaviour of firms facing the decision to create a patent fence, defined as a portfolio of substitute patents. We set up a patent race model, where firms can decide either to patent their inventions, or to rely on secrecy. It is shown that firms build patent fences, when the duopoly profits net of R&D costs are positive. We also demonstrate that in this context, a firm will rely on secrecy when the speed of discovery of the subsequent invention is high compared to the competitor�s. Furthermore, we compare the model under the First-to-Invent and First-to-File legal rules. Finally, we analyze the welfare implications of patent fence

JEL-codes: L10 O34 (search for similar items in EconPapers)
Date: 2005-12-02
New Economics Papers: this item is included in nep-com, nep-ino, nep-ipr, nep-pr~, nep-mic and nep-tid
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Related works:
Journal Article: Fences and competition in patent races (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:2087

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