Publication
The Korean Economic Review
Patent Thicket, Secrecy, and Licensing
Illoong Kwon (Seoul National University)Year 2012Vol. 28No. 1
Abstract
This paper considers a patent portfolio race where firms compete for complementarypatents, called a patent thicket. When firms have an option to keep their innovation secret,this paper shows that there exists an equilibrium where firms’ patent propensity is strictlybetween zero and one. In such an equilibrium, stronger patent protection reduces the firms’investment in innovation. Moreover, this result does not change even when a licensingcontract is feasible.