Patent Portfolios and Firms Technological Choices

25 Pages Posted: 4 Aug 2020

See all articles by Stefano Comino

Stefano Comino

Università degli Studi di Udine

Fabio M. Manenti

University of Padua - Department of Economics and Management

Date Written: June 18, 2020

Abstract

In many industrial sectors, firms amass large patents portfolios to reinforce their bargaining position vis a vis competitors. In a context where patents have a pure strategic nature, we discuss how the presence and the effectiveness of a patent system affect firms technological decisions. Specifically, we present a two-stage game where firms first choose whether to agglomerate (i.e. develop technologies for the same technological territory) or to separate (i.e. develop technologies for different territories) and then they take their patenting decisions. We show that strong patents may distort technological choices yielding to firms to follow inefficient technological trajectories in an attempt to reduce competitors’ patenting activity. While an increase in the strength of patent rights − i.e. the extent to which patents can be used to extract value − undoubtedly distorts firms choices, the impact of a larger scope − the degree to which patent protection carries out in the adjacent ares as well − is ambiguous. We also discuss how such distortions change when one firm is prevented from obtaining its optimal number of patents and when firms patenting activities generate additional
market value.

Keywords: patent portfolios, patent strength and scope, technological territory, strategic patenting

JEL Classification: D43, L13, 034

Suggested Citation

Comino, Stefano and Manenti, Fabio M., Patent Portfolios and Firms Technological Choices (June 18, 2020). Available at SSRN: https://ssrn.com/abstract=3646222 or http://dx.doi.org/10.2139/ssrn.3646222

Stefano Comino

Università degli Studi di Udine ( email )

Via Tarcisio Petracco, Palazzo antonini, 8
Udine, 33100
Italy

Fabio M. Manenti (Contact Author)

University of Padua - Department of Economics and Management ( email )

via Del Santo 33
Padova, 35123
Italy

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