In this paper, we review the economic effects of intellectual property rights and specifically address the economics of the patent system. The production and dissemination of new knowledge is fraught with market failures because knowledge is a public good. Patents provide a second-best solution...

Recent surveys report that firms claim they do not rely heavily on patents in order to appropriate a return on their innovation. Yet, firms do patent, as indicated by the large number of patents that are granted. This paper offers a possible resolution to this puzzle. It takes a simplified...

Basic innovations are often fundamental to the development of applications that may be developed by other innovators. In this setting, we investigate whether patent pools can rectify the lack of incentives for developers to invest in applications. Following Green and Scotchmer (1995), we also...

"Information Disclosure in the Renewal of Patents" (with Claude Crampes), Les Annales d'Economie et Statistique, 49-50, pp 265-288, 1998. Reprinted in The Economics and Econometrics of Innovation, ed. Encaoua, Hall, Laisney, Mairesse, Kluwer academic publishers, 2000.

A patent is not a perfect protection against imitation. It only grants the patentholder the right to sue intruders once they have been identified. In order to identify an infringer, a patentholder must first monitor the market, and then react in case of infringement. His reaction may be to go to...

This paper examines the strategic non-revelation of information by innovators when applying for patents. The lack of accessible prior art (i.e., an existing set of related inventions) may be responsible for the granting of questionable patents by examiners. In a model of a bilateral search of...

Licensing a new technology implies introducing competition into the market. This has a negative effect on the profit of the incumbent if the demand remains unchanged. However, because of the novel content of an innovation, consumers may have different perceptions of the value of a good depending...

The contributory infringement rule assesses liability to a third party that contributes to the infringement of a patent. Not only are firms that directly infringe liable, those who indirectly contribute are also liable. In the e-commerce world, this rule takes on an important dimension because...

Intellectual property rights are legal constraints that limit entry in industries where incumbents are innovators. The set of legal constraints is the same for all industries, without considering that the externalities created by entry are not necessarily negative for the incumbent or that the...

To reduce the competition from farmers who self-produce seed, an inbred line seed producer can switch to nondurable hybrid seed. In a two-period model we investigate the impact of crop durability on self-production, pricing and switching decisions, and we examine the impact of license fees paid...