Patents VS Trade Secrets: Knowledge Licensing and Spillover - Sciences Po Access content directly
Journal Articles Journal of the European Economic Association Year : 2006

Patents VS Trade Secrets: Knowledge Licensing and Spillover

Sudipto Bhattacharya
  • Function : Author
Sergei Guriev

Abstract

We develop a model of two-stage cumulative research and development (R&D), in which one research unit (RU) with an innovative idea bargains to license its nonverifiable interim knowledge exclusively to one of two competing development units (DUs) via one of two alternative modes: an open sale after patenting this knowledge, or a closed sale in which precluding further disclosure to a competing DU requires the RU to hold a stake in the licensed DU's postinvention revenues. Both modes lead to partial leakage of RU's knowledge from its description, to the licensed DU alone in a closed sale, and to both DUs in an open sale. The open sale is socially optimal; yet the contracting parties choose the closed sale whenever the interim knowledge is more valuable and leakage is sufficiently high. If the extent of leakage is lower, more RUs choose open sales, generating a nonmonotonic relationship between the strength of intellectual property rights and aggregate R&D expenditures and the overall likelihood of development by either DU.
Fichier principal
Vignette du fichier
bhattacharya-et-al-2006-journal-of-the-european-economic-association.pdf (359.51 Ko) Télécharger le fichier
Origin : Files produced by the author(s)

Dates and versions

hal-03595505 , version 1 (03-03-2022)

Identifiers

Cite

Sudipto Bhattacharya, Sergei Guriev. Patents VS Trade Secrets: Knowledge Licensing and Spillover. Journal of the European Economic Association, 2006, 4 (6), pp.1112 - 1147. ⟨10.1162/JEEA.2006.4.6.1112⟩. ⟨hal-03595505⟩
39 View
50 Download

Altmetric

Share

Gmail Facebook X LinkedIn More