Optimal Patentability Requirements with Fragmented Intellectual Property Rights
41 Pages Posted: 21 Nov 2009
Date Written: November 20, 2009
We study the effect of the fragmentation of intellectual property rights on optimal patent design. The major finding is that when several complementary innovative components must be assembled to operate a new technology, the patentability requirements should be stronger than in the case of stand-alone innovation. This reduces the fragmentation of intellectual property, which is socially costly. However, to preserve the incentives to innovate, if a patent is granted the strength of protection should be generally higher than in the stand-alone case.
Keywords: patents, complementary innovations, patentability requirements
JEL Classification: L00, O03
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