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Sequential Innovation, Patents, and Imitation

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  • James Bessen

    (Boston University School of Law and Research on Innovation)

  • Eric Maskin

    (School of Social Science, Institute for Advanced Study)

Abstract

We argue that when discoveries are "sequential" (so that each successive invention builds in an essential way on its predecessors) patent protection is not as useful for encouraging innovation as in a static setting. Indeed, society and even inventors themselves may be better off without such protection. Furthermore, an inventor's prospective profit may actually be enhanced by competition and imitation. Our sequential model of innovation appears to explain evidence from a natural experiment in the software industry.

Suggested Citation

  • James Bessen & Eric Maskin, 2006. "Sequential Innovation, Patents, and Imitation," Economics Working Papers 0025, Institute for Advanced Study, School of Social Science.
    • Handle: RePEc:ads:wpaper:0025
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    References listed on IDEAS

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