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Review of Literature on the Use and Impact of IPRs at the Firm Level Patents, Trademarks and Designs
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Review of Literature on the Use and Impact of IPRs at the Firm Level Patents, Trademarks and Designs
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Review of Literature on the Use and Impact of IPRs at the Firm Level: Patents, Trademarks and Designs Federico Munari University of Bologna Department of Management Via Terracini 28 40123 Bologna – Italy Tel: 0039 -051-2090208 Fax: 0039 -051-2090222 Email: federico.munari@unibo.it Prepared for the Observatory as part of the study on the contribution of IP -intensive industries to the European economy . Literature Review by Prof Munari for the EU Observatory 2 Index Executive summary 1. Introduction 2. The conceptual framework: the use and impact of IPRs 3. The economic rationale for patents, trademarks and registered designs 3.1. Overview of patents, trademarks and registered designs 3.2. The economic rationale for patents 3.3. The economic rationale for trademarks 3.4. The economic rationale for registered designs 4. Choice s of IPR protection mechanism s 4.1. Appropriability regimes and the protection of innovation 4.2. The determinants of patent propensity 4.3. The choice of trademarks and registered designs 4.4. Complementarity vs. substitution in the use of IPRs 4.5. Discussion and future research 5. Assessments of IPR value 5.1. Monetary estimates of patent value 5.2. Valuing patents through indicators 5.3. Valuing trademarks trough indicators 5.4. Monetary estimates of trademark value 5.5. Discussion and future research 6. The impact of IPRs on innovation and economic performance 6.1. Patents and innovation perfor mance: firm -level studies 6.2. The impact of patents on economic performance: firm- level studies 6.3. The impact of trademarks on economic performance 6.4. The impact of registered designs on economic performance 6.5. Discussion and future research 7. Conclusions and research agenda 7.1. Summary of previous findings 7.2. Questions for a future research agenda 7.3. Data challenges 7.4. Methodological challenges Literature Review by Prof Munari for the EU Observatory 3 Executive summary This report offers a critical review of existing economic and management literature pertaining to the use and impact of intellectual property rights (IPRs) at the firm level, focusing on patents, trademarks and registered designs. The review depicts the current state of knowledge about firms’ decisions to use and exploit different types of IPRs ; it also hi ghlights whether and how such uses contribute to innovation and economic performance at the firm level. The aim of this review is to provide an updated, comprehensive overview of economic and management studies in the field, highlighting the main results o btained, the major limitations and some under- addressed opportunities for research. It also aims to clarify salient issues for policy makers and thereby to further inform evidence -based IPR policies. This report highlights a series of key results and open issues, at both theoretical and empirical levels , summarized briefly here . Economic rationale for patents, trademarks, registered designs At a theoretical level, the economic rationale for patents, registered designs and trademarks rests on the promotion of innovation and creativity and the protection of the commercial marketplace. Section 3 provides a concise overview of the economic rationales for patents, trademarks and registered design s, as found in extant theoretical literature. According to economic literature, there are two main ways by which patent rights aim to encourage the progress of innovation, and there by promote social welfare: (1) provide an ex ante incentive for innovation by granting exclusive right s to the patent owner and (2) favour th e dissemination of technical information through disclosure. According to theoretical literature on trademarks, the economic benefits associated with them result from the reduction of information asymmetries in the marketplace and the provision of ex ante incentive s to enhance quality investments. Theoretical analys es of registered designs, on the contrary, are almost totally lacking in economic literature, which mainly refers to the creation of ex ante incentive s to enhance design production and creative work. Theoretical contributions have identified a series of costs and distortions that may result from such forms of IPRs . A series of recent theoretical contributions has challenged the underlying assumptions of traditional economic arguments in favour of patent s, trademark s and registered designs, Literature Review by Prof Munari for the EU Observatory 4 emphasizing their potential drawbacks and weaknesses. This broader theoretical literature suggests that patents do not work well as incentive mechanism s for all types of inventions ; rather, their impact on innovation likely depends on a series of characteristics of technologies and markets, such as gains from first -mover advantage s, ease of imitation by followers and the cumulative or fragmented nature of innovation. Fo r trademarks, prior literature has stressed that potential costs may emerge in the form of market power, rent -seeking behaviours and risks of clutter ing. A sizeable and rapidly increasing body of empirical literature analyze s such IPRs, though with a dominant focus on patents. The review of empirical work at the firm level documents the rapidly increasing attention devoted by economic and management academics to the role of IPRs as protection mechanisms and enablers of innovation and firm growth. Yet the majority of existing studies focus on patents ; the evidence base thus far is relatively weak with regard to trademarks and nearly absent for registered designs. Choices of IPR protection mechanisms Companies tend to adopt informal, rather than formal, protection mechanisms, though significant variations exist among companies and sectors. The empirical findings in Section 4 show that, on average, firms rely on varied protection mechanisms , adopting informal rather than formal (i.e. registered IPRs) protection mechanisms more frequently . Significant differences emerge across firms and sectors regarding the choice to recur to registered IPRs though. Some s ignificant determinants of the decision to use patents and trademarks include the nature of the innovation, firm characteristics (i.e . size, strategy, management practices), the industry sector and the broader institutional context. A limited understanding instead continues to hinder questions about what drives the decision to adopt registered designs. There is some initial evidence of positive correlations in the use of IPRs by companies, suggesting benefits related to complementarity.The benefits of buying summaries with Stuvia:
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