We present a simple model wherein a patents regime is inferior to a trade secrets system, meaning that when private returns from innovation under the two regimes are the same, society will be better off if the innovator chooses not to patent. In our model, trade secret licensing is envisaged and...

Maurer and Scotchmer (2002) pointed out that patents may be inferior to other forms of intellectual property in that the independent invention is not a defence to infringement. The authors' analysis refers to situations in which there is an unlimited number of potential entrants by independent...

We present a model where an incumbent firm has a proprietary product whose technology consists of at least two components, one of which is patented while the other is kept secret. At the patent expiration date, an entrant firm will enter the market on the same footing as the incumbent if it is...

Different protection mechanisms may be employed at the same time when an innovation is comprised of separately protectable components. If patents and trade secrets can be mixed in protecting single innovations, a strengthening in patent breadth may induce a lower level of patenting, as...