Allocation Of Intellectual Property Rights Research Articles

Intellectual Property Rights and Debt Financing

Abstract I examine how the investment and financing of innovation are affected by the contractual allocation of intellectual property rights using a Federal Circuit ruling that strengthened firms’ property rights to employee patents. I find that treatment firms’ total debt-to-assets ratio and R&D spending increase by 18% and 9%, respectively, as the residual control over patents increases firms’ incentives to innovate. These effects are more pronounced when ex ante holdup exposure is high. Furthermore, I find a positive marginal effect of asset complementarity as it limits the decline in employee incentives. Consistently, I show that firms’ ex post asset complementarity improves. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

Public procurement and innovation

Innovation has come to the forefront of EU public procurement. Directive 2014/24/EU has given contracting authorities in the Member States a new award procedure to pursue innovation, namely the innovation partnership. Still a number of issues remain open, notably concerning the allocation of intellectual property rights that may call for the application of State aids rules. Further guidance is thus expected from the Commission.

An Empirical Analysis of Intellectual Property Rights Sharing in Software Development Outsourcing

Software development outsourcing (SDO) contracts are plagued with ex post opportunism and underinvestment problems. Property rights theory (PRT) argues that appropriate property rights allocation between vendors and clients can reduce opportunism and incentivize relation-specific investments. We conduct an in-depth content analysis of 171 real SDO contracts and empirically examine how project attributes and contract parties' bargaining power affect the allocation of intellectual property rights (IPR). We find that clients retained more IPR when software development was modularized whereas they shared more IPR with vendors in contracts that incorporated greater use of a vendor's proprietary software. Greater levels of task complexity were associated with more IPR sharing with vendors. We also find that the responsiveness of IPR to project attributes varied across the different types of intellectual assets. For example, vendors were more likely to obtain redeployment rights of know-how if they were contracted for novel software development projects. However, clients were less likely to cede ownership of data and confidential information embedded in software customization projects. We control for a variety of firm and transaction characteristics and the results we obtain here are robust to concerns of endogeneity bias.

Managing the Intellectual Property Disassembly Problem

This article deals with the intellectual property (IP) disassembly problem, which is an increasingly important problem in various contexts. The IP disassembly (IPD) problem is defined as the problem of finding a contractual arrangement for allocation of IP rights and licenses that allows for separating and disintegrating a company, business unit, project entity, resource set, or IP unit in order to enable a transaction, organizational transfer, or dissolution of it. Based on a comparative case study of corporate transactions of Saab Automobile and Volvo Car Corporation this article conceptualizes and characterizes the problem and then develops an IPD framework for managing it.

Incentives and innovation? R&D management in Germany’s chemical and electrical engineering industries around 1900

The allocation of intellectual property rights between firms and employed researchers causes a principal-agent problem between the two parties. We investigate the working contracts of researchers employed by German chemical and electrical engineering firms at the turn of the 20th century and show that the firms were aware of the principal-agent problem and offered performance-related compensation schemes to their scientists. We show that past bonuses are positively correlated with current patenting, whereas past total income is negatively associated with current patenting. Thus, we discover a trade-off between level and structure of compensation on the one hand and patenting activity on the other.

Incentives and Innovation? R&D Management in Germany's High-Tech Industries During the Second Industrial Revolution

The allocation of intellectual property rights between firms and employed researchers causes a principal-agent problem between the two parties. We investigate the working contracts of inventors employed by German chemical, pharmaceutical, and electrical engineering firms at the turn of the 20th century and show that some firms were aware of the principal-agent problem and offered performance-related compensation schemes to their scientists. However, neither a higher total compensation nor a higher share of variable compensation in total compensation is correlated with a higher innovative output. Thus, incentives techniques were already used during the early history of industrial research laboratories, but their impact on innovative output was unsystematic.

Incentives and Innovation: A Multi-Tasking Approach

This paper examines how employees trade off planned activities versus unplanned innovation, and how firms can choose incentives to affect these choices. It develops a multi-task model where employees makes choices between their assigned standard tasks, for which the firm has a performance measure and provides incentives, and privately observed innovation opportunities that fall outside of the performance metrics, and require ex-post bargaining. The model shows how firms adapt incentive compensations in the presence of such unplanned innovation. If innovation are highly firm-specific, firms provide lower-powered incentives for standard tasks to encourage more innovation, yet in equilibrium employees undertake too few innovation. The opposite occurs if innovation are less firm-specific. We also investigate the effectiveness of several possibilities to encourage innovation, such as tolerance for failure, investing in employee innovation, stock-based compensation, and the allocation of intellectual property rights.

Incentives and Innovation: A Multitasking Approach

This paper develops a multitask model where employees make choices between their assigned standard tasks, for which the firm has a performance measure and provides incentives, and privately observed innovation opportunities that fall outside of the performance metrics, and require ex post bargaining. If innovations are highly firm specific, firms provide lower-powered incentives for standard tasks to encourage more innovation, yet in equilibrium employees undertake too few innovations. The opposite occurs if innovations are less firm specific. We also investigate the effectiveness of several possibilities to encourage innovation, such as tolerance for failure, stock-based compensation, and the allocation of intellectual property rights. (JEL D21, J33, M12, O31, O34)

The institutional economics of sharing biological information

Within the field of the governance of biodiversity, initiatives for sharing knowledge through networking distributed databases have emerged, operating both on a global scale (such as the Global Biodiversity Information Facility connecting worldwide biodiversity resources in a searchable database portal) and in more focused issue networks (such as the European Human Frozen Tumour Tissue Bank). In this article, I analyse the institutional conditions for the development of these initiatives in the particular case of microbiological resources. Two main results come out of this analysis. First, microbiological information has to be considered as a complex good, having both public good and common pool resources aspects. Second, to solve the incentive problems for this complex good, we have to go beyond a static conception of efficiency (favouring economic incentives through the allocation of intellectual property rights) and adopt a dynamic framework (geared towards the enforcement of norms of cooperation in a context of changing social preferences and processes of knowledge acquisition throughout the entire innovation chain). Building on the methodologies of successful research programmes on dynamic efficiency in other fields of new institutional economics, I discuss a framework for defining a robust set of design rules for the governance of the microbiological commons.

When Do Employees Become Entrepreneurs?

This paper examines an economic theory of when employees become entrepreneurs. It jointly addresses the two fundamental questions of when employees generate innovations, and whether these innovations are developed as internal ventures or outside the firm. The model shows that if generating innovations distracts employees from their assigned tasks, firms may discourage innovation. Firms may reject profitable opportunities that fall outside of their core activities. If employees own the intellectual property (IP), they may leave to do a start-up. The allocation of IP rights also affects the generation of innovation. The external entrepreneurial environment is a complement to firm-internal innovation. If the external environment is particularly good, firms may embrace employee innovation and take advantage of it through spin-offs.

When do Employees Become Entrepreneurs?

Many new firms are started by entrepreneurs who got the idea while working for their previous employer. Sometimes employers also agree to develop their employees' ideas internally. This paper develops a multi-task incentives model to analyze optimal corporate strategies towards employee innovations. The model explains when employees become entrepreneurs (sometimes even involuntarily); when they become intrapreneurs, managing internal ventures; when they become managers of a corporate spin-off; and when they are denied all of these options. Important determinants for these choices are the allocation of intellectual property rights, and the availability of outside resources, such as venture capital.

Contribution, attribution and the allocation of intellectual property rights: economics versus agricultural economics

In this paper, I compare several readily observable measures of intellectual property rights between agricultural economics—a discipline that attaches considerable importance to author order—and economics—a discipline that attaches little, if any, importance to author order. Specifically, I examine: (1) the incidence of coauthorship—i.e., the likelihood that an individual coauthors with others, (2) the extent of coauthorship—i.e., the number of authors listed on each coauthored paper, (3) the number of individuals thanked for contributing to the research being reported and (4) alphabetization of authorship for papers published in three top journals in each scientific discipline. I find statistically significant differences across-the-board. These differences suggest that interdisciplinary differences with respect to the relative importance attached to contribution affect the allocation of intellectual property rights in science. These findings are compelling because they demonstrate that the allocation of intellectual property rights and how the production of science is structured are related.

Postdoc Servitude in the Academic-Industrial Alliance

Postdocs and graduate students generally do not accrue any of the wealth their work can generate through the intellectual property of patents and copyrights. This topic, although not covered in the special issue “Postdocs working for respect” (3 Sept., p. 1513), is one to be aware of, considering the great riches being created from the alliance between industry and academia. Intellectual property policies of educational institution seldom accommodate students of any kind ([1][1], [2][2]). Most policies are regulated by a written agreement that is based on the employer-employee relationship. But unlike faculty, postdocs and graduate students are not usually classified as employees in the allocation of intellectual property rights. Most graduate and postgraduate program materials do not discuss intellectual property policies ([2][2]); rather, postdocs and students discover them while conducting research, especially if they have participated in a potentially patentable invention. So despite their substantial contribution, postdocs and graduate students usually do not fare well in the affluence of the industry-academia alliance ([3][3]). There are many legal and ethical arguments that can be raised in support of participation of this group in the wealth that their work helps to create ([1][1]). Even if they are required, as are most faculty, to assign their inventions to their university, such agreements can be legally challenged ([2][2]), and a host of other legal precedents and ethical guidelines can be used to bolster their case ([1][1], [2][2]). Postdocs and graduate students may often seem like pawns in many of the academic games they must play. Although one can lament the growing dominance of industry's goal of creating wealth to academia's goal of creating knowledge, postdocs and graduate students should also get their just rewards and not merely be exploited as cheap labor. There are, of course, complex legal criteria for establishing sufficient participation to acquire rights in intellectual property ([2][2]). Because of the complexities involved in all aspects of this issue, educational institutions should provide legal and ethical counseling to their postdocs, students, and faculty for the equitable management of intellectual property rights ([1][1]), and postdoc and graduate student organizations should add intellectual property issues to their agendas. 1. [↵][4]1. L. J. Deftos , Scientist 8 (8 June 1998). 2. [↵][5]1. S. H. Patel , Indiana Law J. 71, 481 (1996). [OpenUrl][6][Web of Science][7] 3. [↵][8]1. S. R. Kulkarni , Hastings Law J. 47, 221 (1998). [OpenUrl][9] [1]: #ref-1 [2]: #ref-2 [3]: #ref-3 [4]: #xref-ref-1-1 View reference 1 in text [5]: #xref-ref-2-1 View reference 2 in text [6]: {openurl}?query=rft.jtitle%253DIndiana%2BLaw%2BJ.%26rft.volume%253D71%26rft.spage%253D481%26rft.genre%253Darticle%26rft_val_fmt%253Dinfo%253Aofi%252Ffmt%253Akev%253Amtx%253Ajournal%26ctx_ver%253DZ39.88-2004%26url_ver%253DZ39.88-2004%26url_ctx_fmt%253Dinfo%253Aofi%252Ffmt%253Akev%253Amtx%253Actx [7]: /lookup/external-ref?access_num=A1996TV71200007&link_type=ISI [8]: #xref-ref-3-1 View reference 3 in text [9]: {openurl}?query=rft.jtitle%253DHastings%2BLaw%2BJ.%26rft.volume%253D47%26rft.spage%253D221%26rft.atitle%253DHASTINGS%2BLAW%2BJ%26rft.genre%253Darticle%26rft_val_fmt%253Dinfo%253Aofi%252Ffmt%253Akev%253Amtx%253Ajournal%26ctx_ver%253DZ39.88-2004%26url_ver%253DZ39.88-2004%26url_ctx_fmt%253Dinfo%253Aofi%252Ffmt%253Akev%253Amtx%253Actx

Data Morphing: Ownership, Copyright and Creation

Copyright law is a powerful weapon in the allocation of intellectual property rights. This article outlines the law and explores current problems in its application to data in computer-mediated works. Using the abstract notion of “data morphing” and its divisions into surface and structural morphing, the article examines basic conflicts between the law and new applications such as virtual reality.