Optimal fragmentation of intellectual property rights

We develop an equilibrium model of product innovation to study the implications of independent invention for the design of intellectual property rights. In the model agents choose whether to be innovators seeking new ideas or imitators absorbing spillovers, and multiple innovators can find the same...

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Veröffentlicht in:International journal of industrial organization 2008-01, Vol.26 (1), p.137-149
Hauptverfasser: Kultti, Klaus, Takalo, Tuomas
Format: Artikel
Sprache:eng
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Zusammenfassung:We develop an equilibrium model of product innovation to study the implications of independent invention for the design of intellectual property rights. In the model agents choose whether to be innovators seeking new ideas or imitators absorbing spillovers, and multiple innovators can find the same idea. It turns out that the optimal intellectual property right is typically strong but non-exclusive, involving fragmentation of the right among different innovators. The optimal number of property right holders is inversely related to the cost of innovation and obsolescence rate. Exclusive patent protection can be approximately optimal only if innovation is costly and the obsolescence rate is high.
ISSN:0167-7187
1873-7986
DOI:10.1016/j.ijindorg.2006.08.005