Intellectual Property Rights in a Quality-Ladder Model with Persistent Leadership
University of Zurich - Department of Economics Library
May 23, 2012
This article analyzes the effects of intellectual property rights in a quality-ladder model in which incumbent firms preemptively innovate in order to keep their position of leadership. Unlike in models with leapfrogging, granting non-expiring forward protection reduces the rate of innovation and imposing a non-obviousness requirement reduces R&D spending. It is shown that full protection against imitation, granted independently of the size of the lead, maximizes the average innovation rate.
Number of Pages in PDF File: 56
Keywords: Intellectual property rights, persistent leadership, cumulative innovation, preemption, forward protection, non-obviousness requirement, patent policy
JEL Classification: L40, O31, O34working papers series
Date posted: June 3, 2012
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