Protecting Early Innovators: Should Second-Generation Products be Patentable?
University of California - Department of Economics ; School of Law, University of California, Berkeley; National Bureau of Economic Research (NBER)
RAND J. OF ECONOMICS, Vol. 27 No. 2
Incentives to develop basic technologies are greater if the patentholder profits from applications or other second-generation products. Assuming that such products infringe the basic patent and that there is not much delay between the innovations, I argue that (i) patents on second-generation products are not necessary to encourage their development and (ii) the patentholder of the basic technology collects a larger share of the profit if applications or other second generation products are not patentable.
JEL Classification: O31Accepted Paper Series
Date posted: July 8, 1998
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