Intellectual Property Rights and Contract Structure

Posted: 20 Nov 1996

See all articles by Tarun Khanna

Tarun Khanna

Harvard University - Strategy Unit

Bharat N. Anand

Harvard University - Strategy Unit

Date Written: October 1996

Abstract

Property rights over knowledge and its output--intellectual property rights--are often weak. We treat the strength of property rights as a primitive of the environment. We examine the effects of the strengths of these rights on the structure of contracts and relationships employed by firms in intellectual property transfers. Variation in the adequacy of property rights across industries allows us to identify these effects. Using a unique dataset assembled for this purpose, we find that firms will structure contracts to optimally circumscribe the threat of imitators. In particular, weak property rights are associated with a lower absolute and relative incidence of licensing activity, fewer licensings of prospective technologies, a higher incidence of transfers to related parties and non-exclusive contracts, and more cross-licensings. The results are not explained by unobserved heterogeneity or jointness in a licenser's decisions concerning various contractual features.

JEL Classification: O34, L20

Suggested Citation

Khanna, Tarun and Anand, Bharat N., Intellectual Property Rights and Contract Structure (October 1996). Yale School of Management Working Paper No. H-3. Available at SSRN: https://ssrn.com/abstract=4448

Tarun Khanna (Contact Author)

Harvard University - Strategy Unit ( email )

Harvard Business School
Boston, MA 02163
United States
617-495-6038 (Phone)
617-495-0355 (Fax)

Bharat N. Anand

Harvard University - Strategy Unit ( email )

Harvard Business School
Soldiers Field Road
Boston, MA 02163
United States
617 495-5082 (Phone)
617 495-0355 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
2,803
PlumX Metrics