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Economics of Innovation Patents Manuel Trajtenberg 2005

Economics of Innovation Patents Manuel Trajtenberg 2005. What are patents all about?. A patent is a legal document that grants monopoly rights over a specific innovation for a specified period of time (~ 20 years).

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Economics of Innovation Patents Manuel Trajtenberg 2005

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  1. Economics of InnovationPatentsManuel Trajtenberg2005

  2. What are patents all about? • A patent is a legal document that grants monopoly rights over a specific innovation for a specified period of time (~ 20 years). • Why? To provide incentives to innovate: if inventions could be copied, nobody will incur the fix costs of developing it. • So important that specified in the US Constitution. • Patents involve a deal: monopoly rights in exchange for disclosure – that further promotes innovation. • As R&D and innovation become more important in the industrialized world, patent protection gains in stature.

  3. Patents as mechanism of appropriability • Innovation: creation of new Knowledge • Nice/nasty property of Knowledge: it leaks out easily! • Costs of copying knowledge usually very low • Hence need protection in order to reap benefits from innovation => • Need appropriability mechanisms

  4. Other mechanisms of appropriability • Secrecy • Lead Times • Monopoly power in the field – barriers to entry Patents – important in pharmaceuticals and chemicals, less in other industries

  5. Additional roles of patents • Tool for mutual deterrence • Tool for transfer/trade in technology, e.g. from Universities, from individual inventors/start ups.

  6. Patent Policy • Scope of what’s patentable: business methods, gene sequences… • “Size” (breath) of patents • How/when to allow for opposition/ appeals? • Whether and when to disclose applications.

  7. International Issues • Harmonization (e.g. first to file vs. first to invent) • Pharmaceutical patents in third world countries. • Enforcement.

  8. Patents as depositories of wealth of information on innovation • Very detailed information, millions of patents • Can study countries, firms, inventors; • Can study links over time and across geography and institutions. • (see front page of patent)

  9. Front page of patent (partial) United States Patent 6,539,988 Pressurized container adapter for charging automotive systems Inventors: Cowan; David M. (Brooklyn, NY); Schapers; Jochen (New York, NY); Trachtenberg; Saul (New York, NY); Nikolayev; Nikolay V. (Flushing, NY) Assignee: Interdynamics, Inc. (Brooklyn, NY) Filed: December 28, 2001 Current U.S. Class:141/67; 137/614.04; 141/351; 251/149.1 Intern'l Class: B65B Primary Examiner: Douglas; Steven O. Attorney, Agent or Firm: Levisohn, Lerner, Berger & Langsam LLP

  10. Front page – cont.References Cited

  11. Compaq 4/1995 TX Compaq 7/1995 TX Intel 11/1996 AZ IBM 3/1997 TX, FL Compaq 10/1998 CA Patent Citations: Spillovers, Importance spillovers “Self-citations” importance

  12. Number of USPTO Patentsby Application Year

  13. US patents granted, by grant year

  14. Distribution of Patents by Technological Categories – Shares

  15. Citations Received by Technological Categories

  16. Spillovers and geography QJE 1993

  17. The Sample

  18. Results – country localization

  19. Results: State and SMSA

  20. The “fading” over time of geographic localization

  21. Patents in CT

  22. Patents and R&D

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