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The Utility Standard and the Patentability of Basic Research

Reiko Aoki and Sadao Nagaoka

No CIRJE-F-160, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: We explore the consequences of the utility requirement for patents on speed of innovation. Basic research output, that has no immediate appli-cation except for as a step to further research, may not be patentable be-cause it does not fulfill the utility requirement of patentability. Patentabil-ity of basic research differs from the questions analyzed in the past sequen-tial innovation framework, in that basic research has no market value in itself and patentability of the first-stage invention, rather than that of the second-stage invention, is an issue. There is never immediate gain for the innovator (or static loss to society) of obtaining a patent and the gain is purely from appropriating future success of the application technology. We extend Denicolo (2000) model to identify conditions in which allowing basic research to be patented is socially desirable.

Pages: 32 pages
Date: 2002-07
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