We investigate how liability rules and property rules protect intellectual property. Infringement might not be deterred under any of the enforcement regimes available. However, counter-intuitively, a credible threat of infringement can actually benefit the patentholder. We compare the two...

The stringency of the novelty requirement in patent law affects the pace of innovation because it affects the amount of technical information that is disclosed among firms. It also affects ex ante profitability of research. We compare weak and strong novelty requirements from the standpoint of...

When there is asymmetric information, contingent fees can allow clients to signal the qualities of their cases and attorneys to signal the quality of their advice. Thus, a well-informed client who has a high-quality case will be willing to pay a relatively high fixed fee and a relatively low...

Incentives to develop basic technologies are greater if the patentholder profits from applications or other second-generation products. Assuming that such products infringe the basic patent and that there is not much delay between the innovations, I argue that (i) patents on second-generation...

In markets with sequential innovation, inventors of derivative improvements might undermine the profit of initial innovators through competition. Profit erosion can be mitigated by broadening the first innovator's patent protection and/or by permitting cooperative agreements between initial...

We explore how well the market will provide shared facilities which are subject to congestion. It is usually efficient to have multiple facilities because it is more efficient to spend resources on facilities than to endure crowding costs. We assume firms can charge a membership price and a...

The patent system is mainly a renewal system: the patent life is chosen by the patentee in return for fees. I ask whether such a system can be justified by asymmetric information on costs and benefits of research. In such a model I show that renewal mechanisms (possibly with subsidies) are...

We show that universities in the United States that provide stronger royalty incentives to faculty scientists generate greater license income, controlling for university characteristics. We use pre-sample data on university patenting to control for the potential endogeneity of royalty shares....

In a model with moral hazard and asymmetric information, we show that it can be welfare improving to differentiate patent lives when firms have different R&D productivities. A uniform patent life provides too much R&D incentive to low-productivity firms and too little to high-productivity ones....

We examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation. Recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to R&D. Yet the propensity of semiconductor firms to...