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Published online by Cambridge University Press:  12 October 2017

Edited by
Stephen M. Maurer
Stephen M. Maurer
Affiliation:
University of California, Berkeley
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Summary

In active investment climates where firms sequentially improve each other’s products, a patent can terminate either because it expires or because a noninfringing innovation displaces its product in the market. We define the length of time until one of these happens as the effective patent life, and show how it depends on patent breadth. We distinguish lagging breadth, which protects against imitation, from leading breadth, which protects against new improved products. We compare two types of patent policy with leading breadth: (1) patents are finite but very broad, so that the effective life of a patent coincides with its statutory life, and (2) patents are long but narrow, so that the effective life of a patent ends when a better product replaces it. The former policy improves the diffusion of new products, but the latter has lower R&D costs.

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On the Shoulders of Giants
Colleagues Remember Suzanne Scotchmer's Contributions to Economics
 , pp. 121 - 156
Publisher: Cambridge University Press
Print publication year: 2017

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  • Document
  • Edited by Stephen M. Maurer, University of California, Berkeley
  • Book: On the Shoulders of Giants
  • Online publication: 12 October 2017
  • Chapter DOI: https://doi.org/10.1017/9781316443057.021
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  • Document
  • Edited by Stephen M. Maurer, University of California, Berkeley
  • Book: On the Shoulders of Giants
  • Online publication: 12 October 2017
  • Chapter DOI: https://doi.org/10.1017/9781316443057.021
Available formats
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Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

  • Document
  • Edited by Stephen M. Maurer, University of California, Berkeley
  • Book: On the Shoulders of Giants
  • Online publication: 12 October 2017
  • Chapter DOI: https://doi.org/10.1017/9781316443057.021
Available formats
×