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Patent portfolios and firms’ technological choices

Author

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  • Stefano Comino

    (Università di Udine)

  • Fabio M. Manenti

    (Università di Padova)

Abstract

In many industrial sectors, firms amass large patent portfolios to reinforce their bargaining position with competitors. In a context where patents have a pure strategic nature, we discuss how the presence and effectiveness of a patent system affect the technology decisions of firms. Specifically, we present a game where firms choose whether to agglomerate (i.e. develop technologies for the same technological territory) or to separate (i.e. develop technologies for different territories) prior to taking their patenting decisions. We show that strong patents may distort technology choices causing firms to follow inefficient technology trajectories in an attempt to reduce their competitors’ patenting activity. We also discuss how such distortions change when a firm is prevented from obtaining its optimal number of patents.

Suggested Citation

  • Stefano Comino & Fabio M. Manenti, 2022. "Patent portfolios and firms’ technological choices," Journal of Economics, Springer, vol. 137(2), pages 97-120, October.
    • Handle: RePEc:kap:jeczfn:v:137:y:2022:i:2:d:10.1007_s00712-022-00783-x
    DOI: 10.1007/s00712-022-00783-x
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    More about this item

    Keywords

    Patent portfolios; Patent strength and scope; Technological territory; Strategic patenting;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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