Working Paper Series
Erika Färnstrand Damsgaard
Patent Scope and Technology Choice
Abstract: This paper analyzes the effect of an increase in patent
scope on R&D and innovation. It presents a model where patent scope affects
an entrant firm's technology choice and thereby creates a trade-off between
R&D investments and wasteful duplication of R&D. The model predicts that an
increase in patent scope can increase the probability of innovation if the
incumbent’s profit increase from innovation is large and the patented
technology has a small advantage over the alternative technology. However,
when the model is extended to Stackelberg competition or licensing, the
benefit of a broad patent scope to a large extent disappears.
Keywords: Innovation; Patents; Patent policy; Licensing; (follow links to similar papers)
JEL-Codes: K20; L51; (follow links to similar papers)
39 pages, March 3, 2009
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