Innovation Fertility and Patent Design

Patents provide a patentee with a degree of monopoly power over a region of product space. The “breadth” and “duration” of patents are policy choices. Increasing patent breadth and duration will ceteris paribus increase the rent, which an individual inventor could earn from a commercially successful invention. However, the precise nature of the relationship between patent policy and the rate of societal technical advance, which is stimulated by a given patent design, is not well understood. In this chapter, the authors novelly investigate this issue using an agent-based modeling approach. The simulation results obtained raise questions about the real utility of patent policy in promoting technological advance and suggest that other policy instruments are actually more important.

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Patent Design Around Method Based on AFD for Umbrella-type Patent Strategy

Journal of Mechanical Engineering ◽

10.3901/jme.2016.05.001 ◽

2016 ◽

Vol 52 (5) ◽

pp. 1 ◽

Cited By ~ 1

Author(s):

Hui LI

Keyword(s):

Patent Strategy ◽

Patent Design

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Optimal Patent Protection: A Macroeconomic Perspective

Asian Journal of Law and Economics ◽

10.1515/ajle-2016-0021 ◽

2016 ◽

Vol 8 (2) ◽

Author(s):

Samuel Meng

Keyword(s):

System Design ◽

Patent Protection ◽

Patent System ◽

Deadweight Loss ◽

Negative Effects ◽

Trade Off ◽

Macroeconomic Analysis ◽

Balanced Approach ◽

Patent Design

AbstractThe need to balance the positive and negative effects of patent monopoly is at the heart of design and reform of the patent system. However, by scrutinizing prior studies on optimal patent design, this paper has found that the basis for this balanced approach is flawed. Furthermore, a macroeconomic analysis of the patent system confirms that there is no trade-off in patent protection, unless the patent system generates only marginal negative effects. The implication of this finding is that a new patent system design is needed to stimulate innovation directly while minimizing deadweight loss.

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The search for new drugs: a theory of R&D in the pharmaceutical industry

Journal of Economic Studies ◽

10.1108/jes-01-2016-0002 ◽

2017 ◽

Vol 44 (5) ◽

pp. 690-726 ◽

Cited By ~ 1

Author(s):

Massoud Khazabi ◽

Nguyen Van Quyen

Keyword(s):

Pharmaceutical Industry ◽

Dynamic Model ◽

New Drugs ◽

Content Type ◽

Time Dynamic ◽

Pharmaceutical Firms ◽

Drug Discovery Program ◽

Conventional Models ◽

Patent Design

Purpose The purpose of this paper is to use a dynamic model of optimal patent design and, in the presence of information externalities, to study the evolution of technological progress in the context of a pharmaceutical industry. Design/methodology/approach A theoretical analysis approach is adopted to drive the paper’s findings. Findings Pharmaceutical firms with an active drug discovery program behave strategically in their R&D and in the product markets. It is shown that a firm holding an earlier-expiring patent only chooses to proceed with R&D activates when the patent it holds expires if the expected discounted payoff net of R&D costs yielded by this action is positive. The expected discounted payoff net of R&D costs obtained by this firm is then decreasing in R&D costs, increasing in the cumulative quality discovered in the past R&D activates, and decreasing in the number of past R&D activities, etc. Originality/value The preceding literature on the topic works with only one brand, the brand with the highest quality. As well, the demand is assumed to be completely inelastic. In the conventional models of patent design, the role of competitive fringe firms is discussed implicitly. The model presented in this research is a rigorous continuous in-time dynamic model. It considers several differentiated products. Furthermore, the demand for a brand is taken to be a function of income, its price, and the prices of other brands. The interaction of the fringe firm with other patent-holding firms is also explicitly considered under this framework.

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