Simulating the Effects of Law on Patent Licensing Process : Agent-Based Modeling Approach

The creation and licensing of patents is a dynamic process in which the impact of law cannot be understated. While agent-based modeling has been used to simulate the diffusion of innovations and the effects of patents on innovations, it has not yet been applied to simulate the effects of law on patent licensing and in broader context, innovations. Agent-based modeling provides adequate information where statistical and algebraic models fail to provide. It enables a dynamic understanding of patent ecosystem and actors within it. In this article, the author presents a novel agent-based model that simulates the effects of patent law on patent creation and licensing processes. By taking into account of legal factors such as patent expiration, the model is able to capture the dynamic relationship between law and market actors such as licensors and licensees. Taking a dynamic approach such as agent-based modeling instead of a static approach such as algebraic models provides a more in-depth knowledge of actions of actors and emergent behaviors within a certain ecosystem