Changes

abstract={Inventors and users of technology often enter into cooperative agreements for sharing their intellectual property in order to implement a standard or to avoid costly litigation. Over the past two decades, U.S. antitrust authorities have viewed pooling arrangements that integrate complementary, valid and essential patents as having procompetitive benefits in reducing prices, transactions costs, and the incidence of legal suits. Since patent pools are cooperative agreements, they also have the potential of suppressing competition if, for example, they harbor weak or invalid patents, dampen incentives to conduct research on innovations that compete with the pooled patents, foreclose competition from downstream product or upstream input markets, or raise prices on goods that compete with the pooled patents. In synthesizing the ideas advanced in the economic literature, this paper explores whether these antitrust concerns apply to pools with complementary patents and, if they do, the implications for competition policy to constrain them. Special attention is given to the application of the U.S. Department of Justice‐Federal Justice-Federal Trade Commission Guidelines for the Licensing of Intellectual Property (1995) and its companion Antitrust Enforcement and Intellectual Property Rights: Promoting Innovation and Competition (2007) to recent patent pool cases.},

thicket_stance_extract={The strength of the anti‐commons anti-commons thesis rests on two assumptions that are very difficult to test: (1) that developing commercial biomedical products requires access to many different IP rights and (2) that negotiating access with different patent owners is prohibitively difficult and costly. On the first point, the number of biotechnology patents has certainly increased dramatically over the last decade, although by itself that does not necessarily imply greater fragmentation. Walsh et al. (2003) report from interviews with biotechnology industry IP practitioners that preliminary freedom to operate searches can sometimes find hundreds of patents relevant to a candidate product but that on closer inspection “there may be, in a complicated case, about 6‐12 6-12 that they have to seriously address, but that more typically the number was zero.” Enough anecdotal evidence exists, however, to suggest that the fragmentation of rights in biotechnology is sometimes a serious concern.},

thicket_stance_extract={Innovations in computer hardware, software, and biotechnology often build on a number of other innovations owned by a diverse set of owners and as a result “patent ?patent thicket" problems - overlapping patent claims that preclude the adoption of new technologies - can be severe.},

thicket_def_extract={Innovations in computer hardware, software, and biotechnology often build on a number of other innovations owned by a diverse set of owners and as a result “patent ?patent thicket" problems - overlapping patent claims that preclude the adoption of new technologies - can be severe.},

abstract={The patent system was initially designed to provide incentives to develop stand-alone innovations in fi…elds fi?elds such as mechanics, chemicals or pharmaceuticals. Its application is therefore problematical in more recent …elds ?elds such as biotechnology and ICT industries, where innovation patterns are different. A well-known problem concerns cumulative innovations. Patent law must then trade off the rights granted to upstream patent owners with the incentives to develop subsequent innovations (Scotchmer, 1991; Donoghue, Scotchmer and Thisse, 1998; Denicolò, 2000). Another issue concerns complementary innovations, which are the focus of the paper. When …final ?final products embody several complementary innovations, the scattering of patents between various owners jeopardizes the commercial exploitation of the products because of negotiation and royalty stacking issues (Merges & Nelson, 1990; Heller & Eisenberg, 1998; Shapiro, 2001). In biotechnology, this is the case of therapeutic proteins or genetic diagnostic tests that require the use of multiple patented gene fragments (Heller & Eisenberg, 1998). It is also very frequent in ICT industries such as electronics, computer hardware and software, where …firms ?firms have to navigate "patent thickets" (Shapiro, 2001). Shapiro (2001) reports, for example, that in the semi-conductor industry …rms ?rms receive “thousands ?thousands of patents each year and manufacturers can potentially infringe on hundreds of patents with a single product". The situation is similar in the U.S. software industry, where there are “potentially ?potentially dozens or hundreds of patents covering individual components of a product”product?(FTC, 2003). I study the problem of the production of complementary innovations in a model of dynamic R&D competition between two …firms?firms, and argue that in some cases complementary innovations should not be patentable as such, but bundled with other innovations prior to patenting. To do so I consider two complementary innovations and examine whether they should be patented separately or as a bundle. This approach echoes several papers on cumulative innovations where patentability requirements are de…ned de?ned as the need to develop two or more successive innovations before obtaining a patent (Scotchmer and Green, 1990; Hunt, 1995; O’DonoghueO?Donoghue, Scotchmer and Thisse, 1998; Denicolò, 2000). As regards complementary innovations, the optimal patenting rule depends on a trade-off between the pro…fit pro?fit loss due to scattered complementary patents, and the possible bene…fit bene?fit of patent disclosure. The scattering of complementary patents between different owners creates a double marginalization issue. Since each patentee behaves as a monopolist, the Cournot (1838) theorem predicts that prices do not maximize the …rms’pro…ts ?rms?pro?ts (Shapiro, 2001; Lerner & Tirole, 2005)1 . The requirement that complementary innovations be bundled prior to patenting can be a way to prevent this pro…t pro?t loss. However, small innovations are not disclosed when innovations have to be bundled prior to patenting (Scotchmer and Green, 1990). As a result, …firms ?firms lose the possibility to quit the race after a …first ?first innovation has been patented, which leads to R&D cost duplications. I show that patent disclosure has a positive social effect, although it does not permit a fully effi cient coordination between …firms?firms. In this context, bundling innovations prior to patenting can be more effi cient if innovations can be devel- oped quickly. As I argue in the Conclusion, this condition is consistent with the legal de…nition de?nition of the "inventive step" patentability requirement. The paper is structured in six sections. First, the model is introduced in Section 2. Section 3 then considers the case in which innovations can be patented separately, while Section 4 focuses on the case in which they must be bundled prior to patenting. Section 5 compares the social outcomes of the two require- ments. Finally, Section 6 concludes and discusses the policy implications of the model.},

thicket_stance_extract={The present paper upholds policy arguments that emphasize the importance of a severe application of this patentability requirement as a means to limit the size of "patent thickets" and to promote innovation in sectors where complementary innovations are frequent (Jaffe, 2000; Barton, 2003; FTC, 2003)... When …final ?final products embody several complementary innovations, the scattering of patents between various owners jeopardizes the commercial exploitation of the products because of negotiation and royalty stacking issues (Merges & Nelson, 1990; Heller & Eisenberg, 1998; Shapiro, 2001)},

thicket_def_extract={It is also very frequent in ICT industries such as electronics, computer hardware and software, where …rms ?rms have to navigate "patent thickets" (Shapiro, 2001).},

abstract={This paper studies the behaviour of …firms ?firms facing the decision to create a patent fence, de…fined de?fined as a portfolio of substitute patents. We set up a patent race model, where …firms ?firms can decide either to patent their inventions, or to rely on secrecy. It is shown that fi…rms fi?rms build patent fences, when the duopoly profi…ts profi?ts net of R&D costs are positive. We also demonstrate that in this context, a fi…rm fi?rm will rely on secrecy when the speed of discovery of the subsequent invention is high compared to the competitor’scompetitor?s. Furthermore, we compare the model under the First-to-Invent and First-to-File legal rules. Finally, we analyze the welfare implications of patent fences.},

thicket_def_extract={More precisely, …firms ?firms will patent a coherent group of inventions, which form what is sometimes called a patent "bulk", aimed at protecting one product. The "bulk" can either be a "fence" of substitute patents or a "thicket" of complementary patents (see Reitzig, 2004 and Cohen et al., 2000).},

@article{schmidt2007negotiatingsiebert2006licensing, title={Negotiating the RNAi Patent ThicketHow licensing resolves hold-up: Evidence from a dynamic panel data model with unobserved heterogeneity}, author={SchmidtSiebert, C.}, journal={Nature biotechnology}, volume={25}, number={3}Ralph and Von Graevenitz, pages={273--280Georg}, year={2007}, publisher={New York, NY: Nature Pub. Co., 1996-2006}, abstract={Patent disputes haven’t materialized in the RNAi field yet, but once products near the market, it might be a different story. Charlie Schmidt investigates.}, discipline={Biology}, research_type={Discussion}, industry={Biology},

tags={RNA Interface}, Licensing, Royalties} , filename={Schmidt Siebert VonGraevenitz (20072006) - Negotiating The Rnai Patent ThicketHow Licensing Resolves Hold Up.pdf}