Patent Thickets, Trolls and Unproductive Entrepreneurship
John L. Turner
University of Georgia - C. Herman and Mary Virginia Terry College of Business - Department of Economics
I introduce and analyze an equilibrium model of invention, patenting and infringement under monopolistic competition. Profitable use of inventions requires adaptation to complementary technologies. With patents, a thicket of conflicting rights emerges and costly infringements occur. This taxes invention and lowers welfare. When an inventor may be a "troll"- patent without inventing - the rate of invention falls further. Intuitively, some trolls would invent if it were impossible to be a troll. More technology is patented with trolls, so the thicket grows and welfare falls. Being a troll is unprofitable unless a critical mass of inventions, made by other firms, exists.
Number of Pages in PDF File: 31
Keywords: litigation, patents, thickets, trolls, discovery
JEL Classification: K2, L2, O3working papers series
Date posted: August 25, 2011 ; Last revised: May 20, 2013
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