Patent Thickets: Strategic Patenting of Complex Technologies
James E. Bessen
Boston University - School of Law; Research on Innovation
Patent race models assume that an innovator wins the only patent covering a product. But when technologies are complex, this property right is defective: ownership of a product's technology is shared, not exclusive. In that case I show that if patent standards are low, firms build "thickets" of patents, especially incumbent firms in mature industries. When they assert these patents, innovators are forced to share rents under cross-licenses, making R&D incentives sub-optimal. On the other hand, when lead time advantages are significant and patent standards are high, firms pursue strategies of "mutual non-aggression." Then R&D incentives are stronger, even optimal.
Number of Pages in PDF File: 30
Keywords: patents, technological innovation, intellectual property
JEL Classification: K3, L1, O3working papers series
Date posted: October 3, 2002
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo1 in 0.781 seconds