Document Type
Working Paper
Publication Date
2003
Language
en-US
Abstract
Patent race models assume that an innovator wins the only patent covering a product. But when technologies are complex, this property right is defective: ownership of a product's technology is shared, not exclusive. In that case I show that if patent standards are low, firms build "thickets" of patents, especially incumbent firms in mature industries. When they assert these patents, innovators are forced to share rents under cross-licenses, making R&D incentives sub-optimal. On the other hand, when lead time advantages are significant and patent standards are high, firms pursue strategies of "mutual non-aggression." Then R&D incentives are stronger, even optimal.
Recommended Citation
James Bessen,
Patent Thickets: Strategic Patenting of Complex Technologies
(2003).
Available at:
https://scholarship.law.bu.edu/faculty_scholarship/3169
