INTELLECTUAL PROPERTY
Intellectual Property Clearinghouses: The Effects of Reduced Transaction Costs in Licensing
By Reiko Aoki and Aaron Schiff
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.
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Scope of the Patent and Uses of the Product in the European Biotechnology Directive
By Emanuela Arezzo and Vincenzo Di Cataldo
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.
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Conditional R&D Subsidies
By Gamal Atallah
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.
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Conditional R&D Subsidies
By Gamal Atallah
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.
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