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Patent Thickets: Strategic Patenting of Complex Technologies

30 Pages Posted: 3 Oct 2002  

James E. Bessen

Boston University - School of Law; Research on Innovation

Date Written: March 2003

Abstract

Patent race models assume that an innovator wins the only patent covering a product. But when technologies are complex, this property right is defective: ownership of a product's technology is shared, not exclusive. In that case I show that if patent standards are low, firms build "thickets" of patents, especially incumbent firms in mature industries. When they assert these patents, innovators are forced to share rents under cross-licenses, making R&D incentives sub-optimal. On the other hand, when lead time advantages are significant and patent standards are high, firms pursue strategies of "mutual non-aggression." Then R&D incentives are stronger, even optimal.

Keywords: patents, technological innovation, intellectual property

JEL Classification: K3, L1, O3

Suggested Citation

Bessen, James E., Patent Thickets: Strategic Patenting of Complex Technologies (March 2003). Available at SSRN: https://ssrn.com/abstract=327760 or http://dx.doi.org/10.2139/ssrn.327760

James E. Bessen (Contact Author)

Boston University - School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States

Research on Innovation ( email )

202 High Head Rd.
Harpswell, ME 04079
United States
617-531-2092 (Phone)

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