Fences and Competition in Patent Races
Author | : Cédric Schneider |
Publisher | : |
Total Pages | : 36 |
Release | : 2014 |
ISBN-10 | : OCLC:1290713693 |
ISBN-13 | : |
Rating | : 4/5 ( Downloads) |
Download or read book Fences and Competition in Patent Races written by Cédric Schneider and published by . This book was released on 2014 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the behavior of firms facing the decision to create a patent fence, defined as a patent portfolio of substitutable technologies. 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 Ramp;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 fences.