Patent Strategies and R&D in Complex Product Industries

Abstract

Economists have agued that when there is a single and isolated innovation in prospect, patents are efficient tools to promote innovative activity. However, innovation does not necessarily occur in isolated settings as previous innovations often stimulate subsequent improvements. Furthermore, the production of many new high-technology products often requires numerous complementary components, each of which may be protected by one or more patents. The facts give rise to a proliferation and fragmentation of intellectual property rights.