Firm Reputation and Incentives to Milk Pending Patents

In this paper we develop a theory of patenting in which a firm preserves its reputation to only apply for a patent whenever a truly patentable idea has been generated. Firms have a short-run incentive to deviate and receive additional rents from unworthy pending patents, as well as potential rents from PTO mistakes in granting patents. We provide conditions for reputation to be preserved in equilibrium and analyze which market environments are favorable for such an equilibrium to exist. In particular, we analyze the merits of different patent systems.

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Year of publication:	2013
Authors:	Koenen, Johannes ; Peitz, Martin
Publisher:	Munich : Center for Economic Studies and ifo Institute (CESifo)
Subject:	pending patents \| reputation \| patent quality \| patent office policy

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Series:	CESifo Working Paper ; 4355
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	756396670 [GVK] hdl:10419/79647 [Handle] RePec:ces:ceswps:_4355 [RePEc]
Classification:	L15 - Information and Product Quality; Standardization and Compatibility ; L22 - Firm Organization and Market Structure: Markets vs. Hierarchies; Vertical Integration ; O34 - Intellectual Property Rights: National and International Issues
Source:	EconStor

Persistent link: https://www.econbiz.de/10010318805