Patent Races and Optimal Patent Breadth and Length

Denicolò, Vincenzo

doi:10.2307/2950496

Cited by 144 publications

(81 citation statements)

References 11 publications

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“…One such case would be to study the possibility of both drastic and non-drastic innovations (Vickers [1986] andReinganum [1985]). One can also perform welfare analysis in our model by explicitly introducing possible patent policies (see Denicolo [1996] 8. Appendix 8.1.…”

Section: Discussionmentioning

confidence: 99%

Innovative Activity with Sunk Cost

2000

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We analyze innovative activity in a general framework with time-dependent rewards and sunk costs. When¯rms are identical, innovation is delayed by an increase in the number of¯rms or a decrease in the size of the reward. When one¯rm has higher pro¯t potential, it is more likely to innovate¯rst. Our framework generalizes an all-pay auction; however, we show that under certain conditions there is qualitatively di®erent equilibrium behavior.

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Section: Discussionmentioning

confidence: 99%

Innovative Activity with Sunk Cost

2000

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“…This way of modeling the acquisition can also be interpreted as ex ante licensing or contract research. 6 The acquisition has both a positive and a negative effect on the merged company. The positive one, which we call efficiency effect, is that it now operates more efficiently than its competitors in the innovation or the product market.…”

Section: Sequential Acquisitionsmentioning

confidence: 99%

“…If overall efficiency is different, the efficiency effect of an acquisition is increased. 6 Important for our way of modeling is that the small firm still performs R&D in the same way as before the acquisition. Otherwise, the superior R&D efficiency would be lost.…”

Section: Sequential Acquisitionsmentioning

confidence: 99%

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Acquisitions in a Patent Contest Model with Large and Small Firms

Kleer

2009

J Ind Compet Trade

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Big companies and small innovation factories possess different advantages in a patent contest. While large firms typically have better access to product markets, small firms often have a superior R&D efficiency. These distinct advantages immediately lead to the question of cooperations between firms. In this paper, we model a patent contest with heterogeneous firms. In a pre-contest acquisition game large firms bid sequentially for small firms to combine respective advantages. Sequential bidding allows the first large firms to bid strategically to induce a reaction of its competitor. For high efficiencies both large firms prefer to acquire immediately leading to a symmetric market structure. For low efficiencies strategic waiting of the first large firm leads to an asymmetric market structure even though the initial situation is symmetric. Furthermore, acquisitions increase the chances for a successful innovation.

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“…vation protected by the patent, patent characteristics can convey useful information. Patent characteristics such as patent length (i.e., the statutory life of a patent) and patent breadth/scope (i.e., the technological territory protected by the patent) have been used in the study of optimal patent design (Gallini, 1992;Gilbert & Shapiro, 1990;Hopenhayn & Mitchell, 2001;Takalo, 2001), patenting and licensing behavior (Green & Schotchmer, 1995;Yiannaka & Fulton, 2006), the R&D process, and the pace of future innovations (Denicolo, 1996;Matutes, Regibeau, & Rocket, 1996;O'Donoghue, Scotchmer, & Thisse, 1998). A few empirical studies have tried to 'quantify' the scope/ breadth of a patent.…”

Section: Introductionmentioning

confidence: 99%