Tradable Patent Rights

32 Pages Posted: 10 Oct 2007 Last revised: 25 May 2014

See all articles by Ian Ayres

Ian Ayres

Yale University - Yale Law School; Yale University - Yale School of Management

Gideon Parchomovsky

University of Pennsylvania Law School

Date Written: 2007


Patent thickets may inefficient retard cumulative innovation. This paper explores two alternative mechanisms that may be used to weed out patent thickets. Both mechanisms are intended to reduce the number of patents in our society. The first mechanism we discuss is price based regulation of patents through a system of increasing renewal fees. The second and more innovative mechanism is quantity based regulation through the establishment of a system of Tradable Patent Rights. The formalization of tradable patent rights would essentially create a secondary market for patent permits in which patent protection will be bought and sold.

Keywords: permits, thickets, license fees, licensing, social costs, infringement, renewal fees, tragedy of the commons, enforcement

JEL Classification: D23, K11, O34,

Suggested Citation

Ayres, Ian and Parchomovsky, Gideon, Tradable Patent Rights (2007). Stanford Law Review, Vol. 60, Pg. 863, 2007; U of Penn, Inst for Law & Econ Research Paper No. 07-23; Yale Law & Economics Research Paper No. 350; Yale Law School, Public Law Working Paper No. 145; U of Penn Law School, Public Law Research Paper No. 07-43. Available at SSRN: or

Ian Ayres (Contact Author)

Yale University - Yale Law School ( email )

P.O. Box 208215
New Haven, CT 06520-8215
United States
203-432-7101 (Phone)
203-432-2592 (Fax)

Yale University - Yale School of Management

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

Gideon Parchomovsky

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
215-898-1603 (Phone)

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