Aoki, Reiko and Schiff, Aaron, "Intellectual Property Clearinghouses: The Effects of Reduced Transaction Costs in Licensing" (June 14, 2007). Available at: http://www.ier.hit-u.ac.jp/Common/publication/DP/DP495.pdf
Abstract:
We focus on downstream uses that combine multiple intellectual property rights and examine the effects of introducing an intellectual property clearinghouse that reduces transaction costs associated with licensing. We show that this causes equilibrium royalties to rise in some cases and may harm licensors because clearinghouse by itself does not eliminate the `tragedy of the anticommons'. Downstream welfare effects may also be positive or negative and we characterise the effects on downstream manufacturers and final consumers. We also show that total welfare is most likely to increase following a transaction cost reduction when the number of intellectual property rights per downstream use is small, or if rights are relatively substitutable in downstream use, but it is also possible for welfare to decrease.

Arezzo, Emanuela and Di Cataldo, Vincenzo, "Scope of the Patent and Uses of the Product in the European Biotechnology Directive" . Italian Intellectual Property, No. 1, 2007 Available at SSRN: http://ssrn.com/abstract=940407
Abstract:
Patent scope is probably one of the most debated issues in patent law generally and it has recently gained new contours thanks to the substantial scientific improvements in genetics and modern biology, which have resulted in the creation of what we now address as the biotech industry. Indeed, the particular features of research carried on genes, proteins, virus, etc. has led many to question the appropriate degree of exclusivity to be granted to the inventor who studies process and elements belonging to nature.

This multi-faceted issue has been carefully addressed by the European Directive 98/44/EC on the legal protection of biotechnological inventions which offers, especially at art. 5, significant insights to appropriately distinguish what is patentable from what is not, and to delimit the proper scope of protection.

With regard to the latter point, art. 5.3 specifies that the industrial application of a sequence or a partial sequence of a gene must be disclosed in the patent application. This is surely one of the most remarkable provision contained in the Directive. Interestingly, at a first glance some national laws implementing the European text seem all to closely follow the blueprint provided for by the Directive. However, there is a significant difference. The Directive establishes that the industrial application of a gene sequence be concretely disclosed in the patent application but, differently from national laws, the Directive does not expressly mention the need to claim the industrial application of the gene sequence.

The need to specify the concrete function performed by the genetic sequence, as codified by the French, the German and the Italian legislator, might reasonably lead one to conclude that the scope to be afforded to the patent should be limited to the industrial application disclosed. This interpretation could lead to a substantive departure from what happens in the chemical industry where patent protection (wrongly, in our modest opinion) is generally intended to be absolute.

A change towards a so called purpose-bound protection would be, in our opinion, particularly welcome, although extremely criticized in part of the patent law literature.

In what follows we will try to provide an exhaustive explanation of why we think that a narrower protection for biotechnological innovation would be more appropriate, especially in light of the peculiarities of the biotech sector.

Atallah, Gamal, "Conditional R&D Subsidies" (2007). University of Ottawa Department of Economics Working Paper No. 0702E Available at : http://mpra.ub.uni-muenchen.de/2895/01/MPRA_paper_2895.pdf
Abstract:
This paper introduces a new type of R&D subsidy, which is conditional on the success of the R&D project. In a three-stage model, the government chooses a subsidy(ies) in the first stage; in the second stage, a monopolist chooses R&D effort which determines the size or the probability of success of the R&D project; in the last stage, the firm chooses its output. It is found that conditional subsidies can yield the same level of innovation and welfare as unconditional subsidies. However, when the probability of success is sufficiently low (be it endogenous or exogenous), conditional subsidies yield suboptimal levels of innovation and welfare. When the firm chooses the probability of success, conditional subsidies can have the advantage of a lower expected cost of the subsidy to the government. I consider the simultaneous use of conditional and unconditional subsidies, and show that different combinations of the two can lead to the same levels of innovation and welfare as unconditional subsidies alone. Finally, reverse conditional subsidies, which the firm gets only if the project fails, are considered. It is found that they yield the same level of innovation as unconditional subsidies, except when the probability of success is sufficiently high. Comparing conditional subsidies with reverse conditional subsidies, conditional subsidies yield higher (lower) welfare when the probability of success is high (low).

Lerner, Josh and Wulf, Julie M., "Innovation and Incentives: Evidence from Corporate R&D" . Review of Economics and Statistics, Forthcoming Available at : http://www-management.wharton.upenn.edu/wulfresearch/docs/Lerner_wulf_innovation_incentives_REstat.pdf
Abstract:
Beginning in the late 1980s, American corporations began increasingly linking the compensation of central research personnel to the economic objectives of the corporation. This paper examines the impact of the shifting compensation of the heads of corporate research and development. Among firms with centralized R&D organizations, a clear relationship emerges: more long-term incentives (e.g. stock options and restricted stock) are associated with more heavily cited patents. These incentives also appear to be associated with more patent filings and patents of greater originality. Short-term incentives appear to be unrelated to measures of innovation.

Toole, Andrew A. and Czarnitzki, Dirk, "Exploring the Relationship Between Scientist Human Capital and Firm Performance: The Case of Biomedical Academic Entrepreneurs in the SBIR Program" (2007). ZEW Discussion Paper No. 07-011 Available at : http://opus.zbw-kiel.de/volltexte/2007/5498/pdf/dp07011.pdf
Abstract:
Do academic scientists bring valuable human capital to the companies they found or join? If so, what are the particular skills that compose their human capital and how are these skills related to firm performance? This paper examines these questions using a particular group of academic entrepreneurs – biomedical research scientists who choose to commercialize their knowledge through the U.S. Small Business Innovation Research Program. Our conceptual framework assumes the nature of an academic entrepreneurs' prior research reflects the development of their human capital. We highlight differences in firm performance that correlate with differences in the scientists' research orientations developed during their academic careers. We find that biomedical academic entrepreneurs with human capital oriented toward exploring scientific opportunities significantly improve their firms' performance of research tasks such as proof of concept studies. Biomedical academic entrepreneurs with human capital oriented toward exploring commercial opportunities significantly improve their firms' performance of invention oriented tasks such as patenting. Consistent with prior evidence, there also appears to be a form of diminishing returns to scientifically oriented human capital in a commercialization environment. Holding the commercial orientation of the scientists' human capital constant, we find that increasing their human capital for identifying and exploring scientific opportunities significantly detracts from their firms' patenting performance.

Goldin, Claudia and Katz, Lawrence F., "The Race between Education and Technology: The Evolution of U.S. Educational Wage Differentials, 1890 to 2005" (March 2007). NBER Working Paper No. W12984 Available at : http://www.nber.org/papers/w12984
Abstract:
U.S. educational and occupational wage differentials were exceptionally high at the dawn of the twentieth century and then decreased in several stages over the next eight decades. But starting in the early 1980s the labor market premium to skill rose sharply and by 2005 the college wage premium was back at its 1915 level. The twentieth century contains two inequality tales: one declining and one rising. We use a supply-demand-institutions framework to understand the factors that produced these changes from 1890 to 2005. We find that strong secular growth in the relative demand for more educated workers combined with fluctuations in the growth of relative skill supplies go far to explain the long-run evolution of U.S. educational wage differentials. An increase in the rate of growth of the relative supply of skills associated with the high school movement starting around 1910 played a key role in narrowing educational wage differentials from 1915 to 1980. The slowdown in the growth of the relative supply of college workers starting around 1980 was a major reason for the surge in the college wage premium from 1980 to 2005. Institutional factors were important at various junctures, especially during the 1940s and the late 1970s.