Optimal Patent Lengths in Polluting Industries

59 Pages Posted: 1 Mar 2022

See all articles by Pak Sing Choi

Pak Sing Choi

National Central University

Eugenio Diaz-Fariña

affiliation not provided to SSRN

Ana Espinola-Arredondo

Washington State University

Felix Munoz-Garcia

Washington State University - School of Economic Sciences

Abstract

This paper examines the setting of optimal patent length in polluting industries.  We find that in the absence of environmental regulation, the patent office offers longer patents when the industry is polluting than otherwise helping mitigate pollution.  In the presence of environmental regulation, however, the patent office sets shorter (longer) patents than otherwise if it assigns  similar  (different)  weights  on  pollution  than  the  environmental agency  does. In each  setting,  we  evaluate  the  patent  inefficiency  that  arises  from  the patent  office ignoring  the  environmental  damages  from  pollution  and/or  environmental regulation. Finally, we extend our model to other contexts, allowing for green innovations, a Pigouvian environmental agency, and inflexible regulations, analyzing how optimal patents are affected.

Keywords: Patent length, emission fees, polluting industries, environmental regulation, environmental damages, green innovation.

Suggested Citation

Choi, Pak Sing and Diaz-Fariña, Eugenio and Espinola-Arredondo, Ana and Munoz-Garcia, Felix, Optimal Patent Lengths in Polluting Industries. Available at SSRN: https://ssrn.com/abstract=4046424 or http://dx.doi.org/10.2139/ssrn.4046424

Pak Sing Choi

National Central University ( email )

Jhongli, Taoyuan 32001, Taiwan.
Jhongli, 32001
Taiwan

Eugenio Diaz-Fariña

affiliation not provided to SSRN ( email )

No Address Available

Ana Espinola-Arredondo (Contact Author)

Washington State University ( email )

Wilson Rd.
College of Business
Pullman, WA 99164
United States

Felix Munoz-Garcia

Washington State University - School of Economic Sciences ( email )

P.O. Box 646210
Hulbert Hall 101
Pullman, WA 99164-6210
United States

HOME PAGE: http://www.ses.wsu.edu/People/munoz.htm

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