Weak Intellectual Property Rights, Research Spill-Overs and The Incentive to Innovate
American Review of Law and Economics, Forthcoming
36 Pages Posted: 30 Apr 2011 Last revised: 18 Jan 2014
Date Written: October 30, 2010
Abstract
We investigate the conditions for the desirability of exclusive intellectual property rights for innovators, as opposed to weak rights allowing for some degree of imitation and ex-post competition. The comparison between the two alternatives reduces to a specific "ratio test," which suggests that strong, exclusive IP rights are preferable when competition from potential imitators is weak, the innovation attracts large R&D investments, and research spill-overs are small.
Keywords: innovation, exclusive rights, patents, trade secrets, spill-overs
JEL Classification: K1, D4, L4
Suggested Citation: Suggested Citation
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