On the Optimality of the Patent Renewal System
Year: 1999
Type: article
Abstract: The patent system is mainly a renewal system: the patent life is chosen by the patentee in return for fees. I ask whether such a system can be justified by asymmetric information on costs and benefits of research. In such a model I show that renewal mechanisms (possibly with subsidies) are equivalent to direct revelation mechanisms and therefore cannot be improved on, regardless of the objective function. Under plausible circumstances, patents should have a uniform life, rather than varying in length, as typically occurs under a renewal system.
Source: The RAND Journal of Economics
DOI: 10.2307/2556076
Author: Suzanne Scotchmer
Institution: University of California, Berkeley
Language: English
Subfield: Management of Technology and Innovation
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2058668201