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Innovation and imitation under imperfect patent protection

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Abstract

The paper develops a model in which the spillover of R&D is a consequence of a rational investment in imitation. The model incorporates the innovator's choice between patenting and secrecy as a protection device. The analysis demonstrates that an increase in patent breadth always discourages resorting to secrecy, whereas the influence of increased patent life is the opposite with large spillovers. An increase in patent life can also reduce innovative activity with large spillovers. Under endogenous imitation, short patents are socially optimal.

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Authors and Affiliations

  1. Department of Economics, University of Helsinki, Unioninkatu 37, P.O. Box 54, FIN-00014, Finland

    Tuomas Takalo

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  1. Tuomas Takalo
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Takalo, T. Innovation and imitation under imperfect patent protection. Journal of Economics Zeitschrift für Nationalökonomie 67, 229–241 (1998). https://doi.org/10.1007/BF01234644

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  • DOI: https://doi.org/10.1007/BF01234644

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