1932

Abstract

Although patent systems have been widely used both historically and internationally, there is nonetheless a tremendous amount of controversy over whether patent systems, in practice, improve the alignment between private returns and social contributions. In this article, I describe three parameters—how the disclosure function affects research investments, how patent strength affects research investments in new technologies, and how patents on existing technologies affect follow-on innovation—needed to inform the question of how patents affect research investments, and review the available evidence that has attempted to empirically estimate these parameters.

Keyword(s): innovationpatentsresearch
Loading

Article metrics loading...

/content/journals/10.1146/annurev-economics-110216-100959
2017-08-02
2024-07-03
Loading full text...

Full text loading...

/deliver/fulltext/economics/9/1/annurev-economics-110216-100959.html?itemId=/content/journals/10.1146/annurev-economics-110216-100959&mimeType=html&fmt=ahah

Literature Cited

  1. Arrow K. 1962. Economic welfare and the allocation of resources for invention. The Rate and Direction of Inventive Activity: Economic and Social Factors R Nelson 609–26 Princeton, NJ: Princeton Univ. Press [Google Scholar]
  2. Bessen J. 2004. Holdup and licensing of cumulative innovations with private information. Econ. Lett. 82:3321–26 [Google Scholar]
  3. Bessen J, Maskin E. 2009. Sequential innovation, patents, and imitation. RAND J. Econ. 40:4611–35 [Google Scholar]
  4. Bloom N, Schankerman M, Van Reenen J. 2013. Identifying technology spillovers and product market rivalry. Econometrica 81:41347–93 [Google Scholar]
  5. Boldrin M, Levine DK. 2013. The case against patents. J. Econ. Perspect. 27:13–22 [Google Scholar]
  6. Budish E, Roin B, Williams H. 2015. Do firms underinvest in long-term research? Evidence from cancer clinical trials. Am. Econ. Rev. 105:72044–85 [Google Scholar]
  7. Budish E, Roin B, Williams H. 2016. Patents and research investments: assessing the empirical evidence. Am. Econ. Rev. 106:5183–87 [Google Scholar]
  8. Carley M, Hegde D, Marco A. 2015. What is the probability of receiving a US patent?. Yale J. Law Technol. 17:1203–33 [Google Scholar]
  9. Cockburn I, Kortum S, Stern S. 2003. Are all patent examiners equal? Examiners, patent characteristics, and litigation outcomes. Patents in the Knowledge-Based Economy W Cohen, S Merrill 19–53 Washington, DC: Natl. Acad. Press [Google Scholar]
  10. Cockburn IM, Lanjouw JO, Schankerman M. 2016. Patents and the global diffusion of new drugs. Am. Econ. Rev. 106:1136–64 [Google Scholar]
  11. Cohen WM, Goto A, Nagata A, Nelson RR, Walsh JP. 2002. R&D spillovers, patents and the incentives to innovate in Japan and the United States. Res. Policy 31:81349–67 [Google Scholar]
  12. Cohen WM, Nelson RR, Walsh JP. 2000. Protecting their intellectual assets: appropriability conditions and why US manufacturing firms patent (or not) NBER Work. Pap. 7552 [Google Scholar]
  13. Cutler D. 2004. Your Money or Your Life: Strong Medicine for America's Health Care System Oxford, UK: Oxford Univ. Press [Google Scholar]
  14. Duggan M, Garthwaite C, Goyal A. 2016. The market impacts of pharmaceutical product patents in developing countries: evidence from India. Am. Econ. Rev. 106:199–135 [Google Scholar]
  15. Farre-Mensa J, Ljungqvist A, Hegde D. 2016. The bright side of patents Unpublished manuscript, Stern School Bus., New York Univ., New York [Google Scholar]
  16. Galasso A, Schankerman M. 2015. Patents and cumulative innovation: causal evidence from the courts. Q. J. Econ. 130:1317–69 [Google Scholar]
  17. Gans JS, Hsu DH, Stern S. 2008. The impact of uncertain intellectual property rights on the market for ideas: evidence from patent grant delays. Manag. Sci. 54:5982–97 [Google Scholar]
  18. Gaule P. 2015. Patents and the success of venture-capital backed startups: using examiner assignment to estimate causal effects Unpublished manuscript, Cent. Econ. Res. Grad. Educ. Econ. Inst., Prague [Google Scholar]
  19. Gilbert R, Shapiro C. 1990. Optimal patent length and breadth. RAND J. Econ. 21:106–12 [Google Scholar]
  20. Graham S, Hegde D. 2015. Disclosing patents’ secrets. Science 347:6219236–37 [Google Scholar]
  21. Green J, Scotchmer S. 1995. On the division of profit in sequential innovation. RAND J. Econ. 26:120–33 [Google Scholar]
  22. Haber S. 2016. Patents and the wealth of nations. George Mason Law Rev. 23:4811–35 [Google Scholar]
  23. Hall BH, Jaffe AB, Trajtenberg M. 2001. The NBER patent citation data file: lessons, insights and methodological tools NBER Work. Pap. 8498 [Google Scholar]
  24. Hegde D, Luo H. 2017. Patent publication and the market for ideas. Manag. Sci. In press. http://dx.doi.org/10.1287/mnsc.2016.2622 [Crossref] [Google Scholar]
  25. Heller M, Eisenberg R. 1998. Can patents deter innovation? The anticommons in biomedical research. Science 280:5364698–701 [Google Scholar]
  26. Jensen K, Murray F. 2005. Intellectual property landscape of the human genome. Science 310:5746239–40 [Google Scholar]
  27. Kitch E. 1977. The nature and function of the patent system. J. Law Econ. 20:265–90 [Google Scholar]
  28. Klemperer P. 1990. How broad should the scope of patent protection be?. RAND J. Econ. 21:113–30 [Google Scholar]
  29. Kortum S, Lerner J. 1999. What is behind the recent surge in patenting?. Res. Policy 28:11–22 [Google Scholar]
  30. Kyle M, Qian Y. 2014. Intellectual property rights and access to innovation: evidence from TRIPS NBER Work. Pap. 20799 [Google Scholar]
  31. Lemley M, Sampat B. 2008. Is the patent office a rubber stamp?. Emory Law J. 58:181–203 [Google Scholar]
  32. Lemley M, Sampat B. 2010. Examining patent examination. Stanf. Technol. Law Rev. 2010:2 [Google Scholar]
  33. Lemley M, Shapiro C. 2013. A simple approach to setting reasonable royalties for standard-essential patents. Berkeley Technol. Law J. 28:1135–66 [Google Scholar]
  34. Lerner J. 2009. The empirical impact of intellectual property rights on innovation: puzzles and clues. Am. Econ. Rev. 99:2343–48 [Google Scholar]
  35. Levin RC, Klevorick AK, Nelson RR, Winter SG. 1987. Appropriating the returns from industrial research and development. Brookings Pap. Econ. Act. 1987:3783–831 [Google Scholar]
  36. Machlup F. 1958. An economic review of the patent system Stud. 15, Subcomm. Pat. Trademarks Copyr. Comm. Judic., US Senate, 85 Congr., 2nd Sess. [Google Scholar]
  37. Mansfield E. 1986. Patents and innovation: an empirical study. Manag. Sci. 32:2173–81 [Google Scholar]
  38. Marco AC, Sarnoff JD, DeGrazia CA. 2016. Patent claims and patent scope Tech. Rep., Work. Group Intellect. Prop. Innov. Prosper., Hoover Inst., Stanford, CA [Google Scholar]
  39. Murray F, Aghion P, Dewatripont M, Kolev J, Stern S. 2016. Of mice and academics: examining the effect of openness on innovation. Am. Econ. J. Econ. Policy 8:1212–52 [Google Scholar]
  40. Nelson R. 1959. The simple economics of basic scientific research. J. Polit. Econ. 67:3297–306 [Google Scholar]
  41. Nordhaus W. 1969. Invention, Growth, and Welfare: A Theoretical Treatment of Technological Change Cambridge, MA: MIT Press [Google Scholar]
  42. Nordhaus W. 2003. The health of nations: the contribution of improved health to living standards. Measuring the Gains from Medical Research: An Economic Approach ed. KM Murphy, RH Topel 9–40 Chicago: Univ. Chicago Press [Google Scholar]
  43. Ouellette LL. 2012. Do patents disclose useful information?. Harv. J. Law Technol. 532:2531–93 [Google Scholar]
  44. Pakes A. 1986. Patents as options: some estimates of the value of holding European patent stocks. Econometrica 54:4755–84 [Google Scholar]
  45. Penrose ET. 1951. The Economics of the International Patent System. Baltimore, MD: Johns Hopkins Press [Google Scholar]
  46. Plant A. 1934. The economic theory concerning patents for inventions. Economica 1:130–51 [Google Scholar]
  47. Putnam J. 1996. The value of international patent protection PhD Diss., Yale Univ New Haven, CT: [Google Scholar]
  48. Roin B. 2005. The disclosure function of the patent system (or lack thereof). Harv. Law Rev. 118:62007–28 [Google Scholar]
  49. Roin B. 2014. The case for tailoring patent awards based on time-to-market. UCLA Law Rev. 61:672679–80 [Google Scholar]
  50. Sakakibara M, Branstetter L. 2001. Do stronger patents induce more innovation? Evidence from the 1998 Japanese patent law reforms. RAND J. Econ. 32:177–100 [Google Scholar]
  51. Sampat B, Williams H. 2015. How do patents affect follow-on innovation? Evidence from the human genome Unpublished manuscript, Mass. Inst Technol., Cambridge: [Google Scholar]
  52. Schankerman M, Pakes A. 1986. Estimates of the value of patent rights in European countries during the post-1950 period. Econ. J. 96:3841052–76 [Google Scholar]
  53. Schmookler J. 1966. Invention and Economic Growth Cambridge, MA: Harv. Univ. Press [Google Scholar]
  54. Scotchmer S. 1991. Standing on the shoulders of giants: cumulative research and the patent law. J. Econ. Perspect. 5:129–41 [Google Scholar]
  55. Scotchmer S. 2004. Innovation and Incentives Cambridge, MA: MIT Press [Google Scholar]
  56. US Supreme Court 2012. Syllabus: Association for Molecular Pathology et al. v. Myriad Genetics, Inc., et al. Rep., US Supreme Court, Washington, DC https://www.supremecourt.gov/opinions/12pdf/12-398_1b7d.pdf [Google Scholar]
  57. Walsh J, Arora A, Cohen W. 2003. Working through the patent problem. Science 299:56091021 [Google Scholar]
  58. Walsh J, Cohen W, Cho C. 2007. Where excludability matters: material versus intellectual property in academic biomedical research. Res. Policy 36:81184–203 [Google Scholar]
  59. Williams H. 2013. Intellectual property rights and innovation: evidence from the human genome. J. Polit. Econ. 121:11–27 [Google Scholar]
/content/journals/10.1146/annurev-economics-110216-100959
Loading
/content/journals/10.1146/annurev-economics-110216-100959
Loading

Data & Media loading...

  • Article Type: Review Article
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error