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Patent Applications

Tournaments and FRAND Royalties

by J. Gregory Sidakvia IP2 Working Paper Series
Tuesday, March 8, 2016

Proponents of the patent-holdup conjecture implicitly model competition among different technologies for inclusion in a standard as a static Bertrand pricing game without (1) any capacity restraints, (2) any product differentiation, and (3) any outside option for the inventors. On the basis of those improbable assumptions, proponents of the patent-holdup conjecture suppose that the FRAND royalty for the technology chosen for inclusion in the standard will approach zero.

The Language of Trust and Reciprocity in Patent Markets: A Sociological Analysis of Property Rights on Messages Resolving Uncertainty in Exchange in Ideas

by Eskil Ullbergvia IP2 Working Paper Series
Monday, December 14, 2015

Firms exchanging technology using the patent system as a trade system (through licensing, cross- licensing, transfer, intermediaries and other mechanisms) face uncertainty that cannot be resolved by information alone; trust in each other’s actions appears to be needed. Information is needed to resolve risk (a probability distribution can be constructed) but uncertainty (where a distribution cannot be made) requires trust in each other’s actions to be resolved and allow for rational decisions to be made regarding price. 

Insider Trading and Innovation

by Ross Levine, Chen Lin, Lai Weivia IP2 Working Paper Series
Thursday, October 1, 2015

This paper assesses whether legal systems that protect outside investors from corporate insiders increase or decrease the rate of technological innovation. Based on over 75,000 industry-country- year observations across 94 economies from 1976 to 2006, we find that enforcing insider trading laws spurs innovation—as measured by patent intensity, scope, impact, generality, and originality. 

Pushing Patent Boundaries: An Empirical Assessment of How Patent Trolls and Other Litigants Use Patent Scope

by Janet Freilichvia IP2 Working Paper Series
Tuesday, August 11, 2015

Patent scope is a fundamental dimension of the patent system. Because scope is so foundational, scholars have worked for decades to build an extensive and well-developed theoretical literature on the topic. There is, however, a glaring absence of empirical work on patent scope. This article conducts the first empirical assessment of how patent owners enforce the scope of their patents. 

The Market Impacts of Pharmaceutical Product Patents in Developing Countries

by Mark Duggan, Craig Garthwaite, Aparajita Goyalvia IP2 Working Paper Series
Wednesday, July 1, 2015

In 2005, as the result of a World Trade Organization mandate, India implemented a patent reform for pharmaceuticals that was intended to comply with the 1995 Trade-Related Aspects of Intellectual Property Rights (TRIPS). We combine pharmaceutical product sales data for India with a newly gathered dataset of molecule-linked patents issued by the Indian patent office. 

Starving (or Fattening) the Golden Goose: Generic Entry and the Incentives for Early-Stage Pharmaceutical Innovation

by Lee Branstetter, Chirantan Chatterjee, Eric Higginsvia IP2 Working Paper Series
Tuesday, May 9, 2017

Generic penetration in the U.S. pharmaceutical market has increased, providing significant gains in consumer surplus. What impact has this had on the rate and direction of pharmaceutical innovation? While the overall level of drug development activity has increased, our estimates suggest a sizable, robust, negative relationship between generic penetration and early-stage pharmaceutical innovation.

A Quality-Adjusted Price Index for Colorectal Cancer Drugs

by Claudio Lucarelli, Sean Nicholsonvia IP2 Working Paper Series
Friday, April 7, 2017

The average price of treating a colorectal cancer patient with chemotherapy increased from about $100 in 1993 to $36,000 in 2005, due largely to the approval and widespread use of five new drugs between 1996 and 2004. We examine whether the substantial increase in spending has been worth it. 

Has the Academy Led Patent Law Astray?

by Jonathan M. Barnettvia IP2 Working Paper Series
Friday, April 7, 2017

Scholarly commentary widely asserts that technology markets suffer from a triplet of adverse effects arising from the strong patent regime associated with the establishment of the Court of Appeals for the Federal Circuit in 1982: “patent thickets” that burden innovation with transaction and litigation costs; “patent holdup” resulting in excessive payouts to opportunistic patent holders; and “royalty stacking” resulting in exorbitant patent licensing fees.

Alternative Remedies in Standard Essential Patents Disputes

by Igor Nikolicvia IP2 Working Paper Series
Friday, April 7, 2017

The possibility to seek and obtain injunctions for the infringement of Standard Essential Patents (SEPs) is limited in both the US and the EU. The reasons for restricting the use of injunctions is due to concern of patent holdup, i.e. the possibility of SEP holder to force standard-implementers to accept onerous licensing terms, exceeding patent’s true economic value, as well as seeing injunctions as incompatible with the commitment given by the patent holder that it will license its SEPs on fair, reasonable and non-discriminatory (FRAND) terms.

Patent Applications

Why Incentives for “Patent Holdout” Threaten to Dismantle FRAND, and Why It Matters

by Richard A. Epstein, Kayvan B. Noroozivia IP2 Working Paper Series
Wednesday, January 18, 2017

An increasing number of judges, legislators and scholars wrongly believe that the FRAND commitment was principally created to advance the interests of technology implementers, and should be interpreted by giving a presumptive preference toward those interests. That premise has led courts to take a categorically hostile view toward awarding injunctions against implementers under all circumstances.