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Method-of-Use Patents, Appropriability, and Antitrust Policy

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  • Roger D. Blair

    (University of Florida)

  • Anita N. Walsh

    (University of Florida)

Abstract

When an inventor discovers a novel, useful, and non-obvious way to use a patent or unpatented product, the Patent Office may issue a method-of-use patent. Because the method-of-use is information, it suffers from the same appropriability and excludability problems that all information bears. This paper examines vertical integration, patent licensing, and bundled pricing as business strategies for extracting the surplus. It also evaluates potential antitrust challenges to bundled pricing.

Suggested Citation

  • Roger D. Blair & Anita N. Walsh, 2020. "Method-of-Use Patents, Appropriability, and Antitrust Policy," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 56(4), pages 651-666, June.
    • Handle: RePEc:kap:revind:v:56:y:2020:i:4:d:10.1007_s11151-020-09753-3
    DOI: 10.1007/s11151-020-09753-3
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    References listed on IDEAS

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    1. DiMasi, Joseph A. & Grabowski, Henry G. & Hansen, Ronald W., 2016. "Innovation in the pharmaceutical industry: New estimates of R&D costs," Journal of Health Economics, Elsevier, vol. 47(C), pages 20-33.
    2. Phlips,Louis, 1989. "The Economics of Imperfect Information," Cambridge Books, Cambridge University Press, number 9780521309202.
    3. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626, National Bureau of Economic Research, Inc.
    4. Phlips,Louis, 1989. "The Economics of Imperfect Information," Cambridge Books, Cambridge University Press, number 9780521313810.
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    Cited by:

    1. Roger D. Blair, 2020. "The Intellectual Property-Antitrust Interface," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 56(4), pages 557-561, June.

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