Patent Systems for Encouraging Innovation: Lessons from Economic Analysis

ScienceDirect Research Policy 35 (2006) 1423–1440

18 Pages Posted: 27 Jan 2015

See all articles by David Encaoua

David Encaoua

Université Paris I Panthéon Sorbonne

Dominique Guellec

Organization for Economic Co-Operation and Development (OECD)

Catalina Martínez

Spanish Council for Scientific Research (CSIC) - Institute of Public Goods and Policies (IPP)

Date Written: 2006

Abstract

Economic theory views patents as policy instruments aimed at fostering innovation and diffusion. Three major implications are drawn regarding current policy debates. First, patents may not be the most effective means of protection for inventors to recover R&D investments when imitation is costly and first mover advantages are important. Second, patentability requirements, such as novelty or non-obviousness, should be sufficiently stringent to avoid the grant of patents for inventions with low social value that increase the social cost of the patent system. Third, the trade-off between the patent policy instruments of length and breadth could be used to provide sufficient incentives to develop inventions with high social value. Beyond these three implications, economic theory also pleads for a mechanism design approach: an optimal patent system could be based on a menu of different degrees of patent protection where stronger protection would involve higher fees, allowing self-selection by inventors.

Keywords: Patent subject matter; Patentability requirements; Sequential innovations; Incentive mechanism; License fee

JEL Classification: O31, O34

Suggested Citation

Encaoua, David and Guellec, Dominique and Martinez, Catalina, Patent Systems for Encouraging Innovation: Lessons from Economic Analysis (2006). ScienceDirect Research Policy 35 (2006) 1423–1440, Available at SSRN: https://ssrn.com/abstract=2555628

David Encaoua (Contact Author)

Université Paris I Panthéon Sorbonne ( email )

MSE, 106-112 Bd de l'Hôpital 75013 Paris
Paris, 75013
France

Dominique Guellec

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Catalina Martinez

Spanish Council for Scientific Research (CSIC) - Institute of Public Goods and Policies (IPP) ( email )

Albasanz, 26-28
Madrid, 28037
Spain

HOME PAGE: http://www.ipp.csic.es/

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