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Patent Length and the Timing of Innovative Activity

Melbourne Business School Working Paper No. 2004-19

15 Pages Posted: 1 Jul 2004  

Joshua S. Gans

University of Toronto - Rotman School of Management; NBER

Stephen P. King

Monash University - Department of Economics; Productivity Commission

Multiple version iconThere are 2 versions of this paper

Date Written: July 2004

Abstract

The standard result in patent policy, as demonstrated by Gilbert and Shapiro (1990), is that infinitely lived but very narrow patents are optimal as deadweight losses are minimized and spread through time, but inventors can still recover their R&D expenditures. By extending their innovative environment to include timing as an important choice, we demonstrate that a finitely lived, but broader, patent is socially desirable. This is because a patent breadth is a better instrument than length to encourage socially optimal timing. Thus, patents need not be infinitely long in order to encourage a greater number of inventions.

Keywords: Invention, patent length, patent breadth, timing, R&D expenditures

JEL Classification: L4, O34

Suggested Citation

Gans, Joshua S. and King, Stephen P., Patent Length and the Timing of Innovative Activity (July 2004). Melbourne Business School Working Paper No. 2004-19. Available at SSRN: https://ssrn.com/abstract=560841 or http://dx.doi.org/10.2139/ssrn.560841

Joshua S. Gans (Contact Author)

University of Toronto - Rotman School of Management ( email )

Canada

HOME PAGE: http://www.joshuagans.com

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Stephen Peter King

Monash University - Department of Economics ( email )

Wellington Road
Victoria, Roodepoort 3145
Australia

Productivity Commission ( email )

Level 28
35 Collins St.
Melbourne, Victoria, Victoria 3000
Australia

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