Strong Patent Rights Research Articles

The Scope of Software Patent Protection in the Digital Age: Evidence from Alice

Previous studies on software patents using data from the 1990s and early 2000s found a positive association between strong patent rights and sales within the software industry. Our research expands on this work in three ways. First, we consider more recent data from 2010 to 2018, which better represent the advancements in digitalization. Second, we shift our focus to the breadth of software patent protection rather than the quantity of patents held by a firm. Third, we provide evidence showing increased open-source involvement and sales for software firms when software patent protection is more limited. Put simply, a more restricted scope of software patent protection could foster a beneficial situation for both software firms and society. Despite less reliance on formal patent protection, companies can still generate and profit from their innovations without excluding societal members from utilizing these advancements. This “less-is-more” approach may extend to a wider array of software-related innovations, including but not limited to artificial intelligence, blockchain, and other emerging digital technologies.

Development of Academic Patenting in European Regions – A Large Scale Analysis

Abstract In this article, we analyze academic patenting on an unprecedented scale - for 29 European countries. The comprehensive identification phase captures both groups of academic patents, in and outside of the ownership of universities. With stronger patent rights of universities, the share of university-owned patents is increasing faster. Nevertheless, even today, universities own only one third of their patents while the other two thirds remain in the property of individuals and companies. Universities have recently accounted for 13% of regional patent production and compared to firms their contribution to region’s innovation performance remains small. The share of academic patents is higher in Eastern Europe and in regions where innovative companies are lacking, in capital regions, and in regions with a strong tradition in academic patenting. The contribution of universities to the innovation performance of the most innovative regions is relatively small, although there are large differences, and the size of the contribution can vary significantly for similar levels of patent intensity. Given the effects of university research, it has been known since the 1990s that increasing university spending on research is driving innovation on the part of companies and within the region. However, such an effect is limited to high quality research and is most effective in terms of regional policy in poor regions where innovative companies are lacking. In this paper, instead of research expenditure, university patents filed with the EPO represent university research, as other patents are assumed to be a product of companies. We have found that the latter can be predicted by the volume of academic patents.

Why healthcare market needs government intervention to improve access to essential medicines and healthcare efficiency: a scoping review from pharmaceutical price regulation perspective

AbstractBackgroundAccess to quality essential medicines at affordable price to patients in the healthcare market is one of the main goals of universal health coverage and health-related sustainable development goals. Healthcare market is imperfect, and the government cannot ensure access to essential medicines if the market is left to operate under invisible hand control. This scoping review was conducted with intention to provide the clear picture on impact of pharmaceutical price regulation on access to essential medicines, drug innovation and launching.MethodsWe searched articles written in the English language since January 2000 from PubMed, Embase, Scopus, Ovid/Medline and Google scholar with systematic search query.ResultsAccess to essential medicines, which is defined in terms of availability, affordability, accessibility, acceptability and quality of drugs, can be improved by pharmaceutical price regulation. Countries can use different price regulation strategies based on their healthcare objectives and priority healthcare needs. Country-specific pharmaceutical price regulation could not significantly affect drug innovation and launching. However, supportive strategies such as open public funding for drug innovation research, providing innovation awards and strong patent rights can counterbalance the effect of price regulation on innovation and drug development research in developed countries.ConclusionRegulating pharmaceutical pricing system is one of the key strategies to ensure access to essential medicines. Countries that have implemented pharmaceutical price regulation system (Germany, the UK, Canada and Iran) have achieved better access to essential medicines. However, the US and Ethiopian health systems that are unregulated concerning pharmaceutical pricing had a great challenge of affordability of essential medicines. Therefore, setting country-specific pharmaceutical price regulation system along with additional strategies to improve drug innovation is critical to ensure access to essential medicines.

Patent implications in the pharmaceutical industry: Are static high prices leading to dynamic innovations?

Agreement on Trade Related aspects of Intellectual Property Rights (TRIPS) was laid on the premises of rewarding monopolistic patent rights to the innovator. Stronger patent protection was advocated to promote technology transfer from developed nations to the rest of the world. To boost domestic innovative potential and to maintain trade ties, most developing countries signed the TRIPS agreement. Impact of patent laws in the pharmaceutical industry was crucial as it posed threat to access health. This paper aims to analyze the impact of pharmaceutical product patent laws incorporated under the TRIPS agreement using 65 countries panel dataset from 1995 to 2016. The data is empirically analyzed using negative binomial regression and Poisson regression. Results clearly indicate that the number of pharmaceutical patents filed in US Patent and Trademark Office (USPTO) has decreased after TRIPS compliance in both low and middle income countries. However, the decline is larger in upper middle and lower middle income countries than in low income countries. The phenomenon of low patent activity has an increasingly declining trend across low and middle income countries. Hence the claimed hypothesis that stronger patent rights would increase innovative potential does not seem to stand true, which raises serious affordability concerns of bringing patents in the pharmaceutical sector.

The impact of patent protection and financial development on industrial R&D

Stronger protection of patent rights is thought to spur innovation through securing returns to R&D investments. Those investments must be financed, however, suggesting that the responsiveness of R&D to patent reforms varies with financial development levels. We examine the joint impact of domestic and international financial-market development and patent protection on R&D intensities in 22 manufacturing industries in 20 OECD countries for the period 1990-2009. We show that stronger patent rights increase R&D intensities in patent-intensive industries, accounting for the need for external financing and the amount of tangible assets. The primary impact varies across types of financial development: patent protection raises R&D in high-patent industries where countries have more limited equity and credit markets. In contrast, in countries with more developed bond markets industry R&D is more sensitive to patent rights. Interestingly, patent rights in countries that are more exposed to foreign direct investment increase R&D intensities at all levels of financial development.

How Patent Rights Affect Vietnam’s Importation

Stronger patent rights will help innovators to protect their inventions in domestic and export markets, however stronger patent right exporting decisions depend on market expansion and market power effects. Although it is quite late to promulgate patent law, Vietnam began to record patent applications and granted them for both domestic and foreign firms from 1981 (patent law was enacted in 2005). However the number of foreign patent applications is different among Vietnam trade partners. I use a number of patent applications of Japan, the United States, the United Kingdom, Germany, and France to analyze the relationship between trade inflow from those countries and patent rights, I find that Japan applied for the greatest number of patents, which have increased over time. Japanese exports to Vietnam are dominated by market power effects, while other countries’ patent application numbers tend to fluctuate or increases insignificantly over time, with exports being dominated by market expansion effects.
 Keywords
 Patent right, market power effects, market expansion effects, Vietnamese importation
 References
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Domestic patent rights, access to technologies and the structure of exports

AbstractRecent years have seen major reforms in patent laws around the world. We study the effects of variations over time and across countries in the strength of domestic patent rights (PRs) on exports in high‐R&D goods. Adopting a generalized factor‐proportions framework, we interact industry research intensity with national PRs. Countries with stronger PRs have significantly greater exports in research‐intensive sectors. These effects are positive in emerging and developing economies but smaller than in developed economies. The sensitivity of high‐R&D exports to PRs rises with inward flows of patent applications, FDI employment and intra‐firm trade with multinational firms.RésuméDroits de brevet domestiques, accès aux technologies, et structure des exportations. Au cours des années récentes, on a vu des réformes majeures du droit des brevets autour du monde. On étudie les effets de variations (dans le temps et entre pays) dans la robustesse des droits de brevet domestiques (DBs) sur les exportations des biens à forte intensité de R&D. À l’aide d’un cadre de référence généralisé axé sur les proportions de facteurs, on étudie les interactions entre l’intensité en recherche des industries et les DBs nationaux. Les pays dotés de DBs plus robustes ont des exportations plus grandes de manière significative dans les secteurs à forte intensité de recherche. Ces effets sont positifs dans les pays en émergence et en voie de développement, mais plus faibles dans les pays développés. La sensibilité des exportations de biens à forte intensité de R&D aux régimes de DBs s’accroît à proportion que s’accroissent les flux d’applications de brevets en provenance de l’extérieur, l’emploi attaché aux flux d’investissements direct de l’étranger, et le volume du commerce intra‐firme avec les firmes plurinationales.

The Impact of Patent Protection and Financial Development on Industrial R&D

Stronger protection of patent rights is thought to spur innovation through securing returns to R&D investments. Those investments must be financed, however, suggesting that the responsiveness of R&D to patent reforms varies with financial development levels. We examine the joint impact of domestic and international financial-market development and patent protection on R&D intensities in 22 manufacturing industries in 20 OECD countries for the period 1990-2009. We show that stronger patent rights increase R&D intensities in patent-intensive industries, accounting for the need for external financing and the amount of tangible assets. The primary impact varies across types of financial development: patent protection raises R&D in high-patent industries where countries have more limited equity and credit markets. In contrast, in countries with more developed bond markets industry R&D is more sensitive to patent rights. Interestingly, patent rights in countries that are more exposed to foreign direct investment increase R&D intensities at all levels of financial development.

Impact of patent litigation on the subsequent patenting behavior of the plaintiff small and medium enterprises in Japan

This paper examines the impact of patent litigation on the subsequent patenting behavior of the plaintiff small and medium enterprises (SMEs) in Japan. The results show that plaintiff SMEs tend to reduce patent applications after patent litigation. Although there are several possible interpretations for this finding, we argue that it is most likely due to the negative effects of the high cost of patent litigation on the R&D activities of the plaintiff SMEs during the period of patent litigation. Moreover, we also find that the strength of patent rights applied for by the plaintiff SMEs after patent litigation increases. We argue that this is because the plaintiff SMEs realize the importance of the quality of patent rights and learn how to apply for stronger patent rights after experiencing patent litigation as plaintiffs. However, this learning effect only lasts until the fourth year after litigation and then disappears or starts to reverse beginning with the fifth year after litigation.

How Malleability Matters

In The Malleability of Patent Rights, I developed the concept that patent rights are malleable rather than static and fixed, and distinguished malleability from the idea that patent rights are merely uncertain. Malleability refers to the idea that the strength and scope of patent rights can be altered by the actors who interact with a patent well after it has issued. Patent law is full of mechanisms that allow for these post-issuance changes, and yet there seems to be no good theoretical argument that supports malleability. At best, I concluded, the costs of malleability must be weighed against the doctrinal cures, and perhaps those cures themselves would come with greater costs of their own. This Essay builds upon The Malleability of Patent Rights to explain how viewing patent rights as malleable can dramatically alter conventional narratives of the patent system, both those told by supporters of strong patent rights and those who argue that the patent system must be changed to favor competitors. In doing so, it provides examples of how the malleable nature of patent rights can present real problems for the patent system.

Patent rights, product market reforms, and innovation

In this paper, we provide empirical evidence to the effect that strong patent rights may complement competition-increasing product market reforms in fostering innovation. First, we find that the product market reform induced by the large-scale internal market reform of the European Union in 1992 enhanced, on average, innovative investments in manufacturing industries of countries with strong patent rights since the pre-sample period, but not so in industries of countries with weaker patent rights. Second, the positive response to the product market reform is more pronounced in industries where, in general, innovators tend to value patent protection higher than in other industries, except for the manufacture of electrical and optical equipment. The observed complementarity between competition and patent protection can be rationalized using a Schumpeterian growth model with step-by-step innovation. In such a model, better patent protection prolongs the period over which a firm that successfully escapes competition by innovating, actually enjoys higher monopoly rents from its technological upgrade.

Patent Koruması İleri Teknoloji İçeren Ürünlerin İthalatını Arttırıyor mu Türkiye Örneği

Most of studies on the impacts of patent rights on international trade flows have analysed from perspective of developed countries. However, the developing countries constitute important part of debates about patent rights. This study contributes literature by analysing the impact of stronger patent rights in Turkey on high tech imports. The empirical results suggest that stronger patent rights increase high tech imports at the aggregate and nine product categories.

Trolling around the Patent-Antitrust Interface: The Roots of the NPE Challenge and the Role of Antitrust in Patent Reform

Over the past few years, a growing number of critics have complained that nonpracticing “patent trolls” threaten the American economy. These entities and their patent monetization practices have begun to generate inquiries from sources both scholarly and political. This article sets the stage for the nascent antitrust inquiry into patent trolls by reviewing the history of the patent-antitrust interface, showing the relationship between these two bodies of law and broader economic thought, and demonstrating the ways in which the—generally positive—recalibration of their interface in recent decades has created many of our current challenges. In particular, it focuses on the creation of our contemporary system of very strong patent rights beginning in the early 1980s and on the ways in which these rights have proven to be so strong that they may be invite anticompetitive abuse.

Patent rights and economic growth: evidence from cross-country panels of manufacturing industries

The objective of patent rights is to foster innovation and economic growth. However, to date, there is little robust evidence that patents achieve this objective. Here, we study the impact of changes in effective patent rights within panels of up to 54 manufacturing industries in up to 72 countries between 1981–2000. Stronger patent rights were associated with faster growth in more patent-intensive industries, and the effect was larger in higher-income countries. Between 1991–1995, an increase in the level of effective patent rights from Turkey to Singapore was associated with the average growth of the other chemicals and leather industries being respectively 1/6 and 1/17 higher. Patent rights were associated with faster growth through both factor accumulation and raising productivity. Our findings were robust to alternative measures of patent rights and patent intensity.

Patents, Technology Adaptation, and Exports to Developing Countries

This paper conducts a disaggregated analysis of high technology trade to determine which high technology goods, if any, developed countries export in the presence of stronger developing country patent rights. One argument for implementing strong patent rights in developing countries is that doing so will attract high technology exports from industrialized countries, which should consequently lead to economic growth. However, the impact of patent rights on high technology exports is not identical across all industries. This paper postulates that the role of developing country patent rights in increasing high technology imports depends on the production and adaptation costs of foreign innovating firms, and the usefulness of the high technology good in developing country production processes. When the cost of adapting a foreign innovation for use in developing countries is relatively low, and when the innovation is highly useful in the domestic production processes of developing countries, strengthening patent protection has little impact on attracting foreign innovations. However, when the cost of adapting the good for use in developing countries is relatively high, patent protection can be used as a policy tool to limit competition, raise the price received by innovating firms, and, ultimately, attract foreign high technology goods from abroad.

Enforcement Costs: Some Humanitarian Alternatives to Stronger Patent Rights

Diseases that cause comparatively few problems in developed countries kill millions of people in the Third World each year. In many cases, people die because they cannot afford the medication needed to save their lives. In others, there are simply no drugs available because there are no wealthy western patients to justify pharmaceutical companies investing in a cure. This reveals a deep-seated problem within the patent system and the pharmaceutical industry that emphasises markets and profits at the expense of health and global welfare. Global efforts have seen substantial improvements in access to medicines in isolated areas, but with international agreements driving towards stronger patent protection and the expiry date for the TRIPS grace period fast approaching, it is time to consider alternatives which will allow the patent system to work for the humanitarian cause rather than against it. This paper considers two such problems in the patent system and pharmaceutical industry - prohibitive pricing and misdirected incentives - to offer a mode of regulation and enforcement that will support both a viable pharmaceutical industry and the human right to health and medication.

Regulatory Policies and Business Strategies on Patent Protection: A General Model and Cases for the East Asian Economy

This paper proposes a general framework of patent protection which can be applied to most existing theories, and can be used to resolve various issues regarding the protection of information technology (IT)-enabled innovations, especially those involving business methods (BMs) and software. We suggest that one should consider that firms have many strategic choices or mixtures of appropriate combinations of innovations, examine different combinations of menu components rather than focusing on well-explored policies, revise market assumptions to make them more realistic and capture the complexity of policy-strategy assumptions by applying methodologies, such as experiments, system dynamics and intelligent agent theory. The work explores how these innovations are protected using the cases in the East Asian economy and find out that software and BMs are better protected in the nations that enforce strong patent rights.

Patent Laws, Product Lifecycle Lengths, and the Global Sourcing Decisions of U.S. Multinationals

This paper investigates the impact of patent laws on firms’ global sourcing decisions. I develop a theoretical model of multinational firms’ location and production decisions in the presence of cross-country differences in intellectual property rights and cross-sector differences in the length of product lifecycles. I show that patent reforms are irrelevant to firms’ sourcing decisions in industries with rapid product turnover. By contrast, strong patent laws attract affiliate activity in industries with longer product lifecycles, because products in these industries are more likely to be imitated prior to obsolescence and are thus more reliant on patent enforcement to protect revenues. These effects are more pronounced for less-productive firms. Using comprehensive panel data on the sales, assets, and employment of U.S. multinationals and their affiliates abroad and a new measure of product obsolescence, I find robust empirical support for these predictions. Effects are significant along all margins of multinational activity, including multinational presence by country and sector, total affiliate sales conditional on presence, the number of affiliates, and affiliate-level sales. In addition, I find that stronger patent rights tilt the balance of cross-border activity away from exports and toward multinational activity. Finally, my identification strategy allows me to isolate the causal effect of patent reforms on multinational operations, which the prior literature has struggled to establish because of concurrent policy reforms.

A Short History of the Intellectual Property Clause: A Review of 19th and 20th Century Landmark Patent Cases

The American patent system emanates from the intellectual property clause in Article I of the U.S. constitution. Over two centuries of Congressional Acts and court legal opinions have shown a pattern of supporting strong patent rights.In contrast to the view that supports strong patent rights, the article shows a history of patent abolitionists in the nineteenth century and an anti-patent movement in the twentieth and twenty-first centuries that prefers weak patent rights. The patent critics share the view that patents block progress because of the exclusive right that prevents others from making, selling or using a patented invention. The patent critics prefer a system to encourage innovation that supports prizes. Most of the patent critic arguments focus on short term benefits to the occasionally successful inventor and completely ignore the ex ante risks and costs of invention and the long-run benefits of dynamic efficiency obtained by a strong patent system.The article observes that prizes were used before patents were prominent in the nineteenth century and that there are limits to prizes. The insight of the founding fathers was to embed patent rights into inventions that will provide an opportunity for the inventor to commercialize the inventions. The success of the American patent system has produced waves of industrial success, illustrating that a strong patent regime is an economic necessity.To deal with patent critics, the courts and Congress have constrained elements of the patent system when necessary. These limitations have addressed issues that balance the patent regime to protect the public interest but also to incentivize investment in scientific and technological research and to promote economic progress.

Promoting Progress: Incentivizing Technology Risk-Taking and Investment with Limited Exclusive Patent Rights

Analytical economic evidence shows that a strong patent system provides incentives for investing in technology and encourages competition that tends to promote progress in the long run.Critics of patents look to short run exclusive rights that suggest an “anticommons” that blocks competition, but these arguments are limited. Patent critics ignore the ex ante risks and costs of scientific discovery and technological invention. The article examines the microeconomic arguments for investment in technology and examines the costs and risks of technology investment. The article applies real options analysis (ROA) to modeling of risk scenarios. The article also examines transaction costs to determine that costs are a significant factor in technology investment justifications. The increased risks increase the costs of capital. With increased uncertainty of the patent grant, the costs of capital increase beyond an optimal rate of investment, with high risk inventions at the periphery not sustainable.The article argues for strong patent rights that protect ex ante investment in risky technologies, maximizes competition between multiple technologies and promotes progress in the long run.