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The Utility Standard and the Patentability of Intermediate Technology

Author

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  • Reiko Aoki
  • Sadao Nagaoka

Abstract

We explore the consequences of the utility requirement on speed of innovation and welfare. A weak utility requirement means that an intermediate technology with no immediate application or commercial value is patentable. Using a model of two stage innovation with free entry and trade secrecy, we identify cases when patentability is beneficial to society. Although a firm may undertake basic research protected by trade secrecy, patentability is still desirable when spillover is high and innovation costs are high. However, patentability becomes less desirable as basic research costs decrease. We also show that high value of final technology by itself does not favor non-patentability and identify condition when it does.

Suggested Citation

  • Reiko Aoki & Sadao Nagaoka, 2005. "The Utility Standard and the Patentability of Intermediate Technology," Hi-Stat Discussion Paper Series d04-75, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hst:hstdps:d04-75
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    File URL: http://hi-stat.ier.hit-u.ac.jp/research/discussion/2004/pdf/D04-75.pdf
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    Cited by:

    1. Masuyuki Nishijima, 2004. "Effects of the Anticommons on R&D: The Case of University Corporation in Japan," Econometric Society 2004 Far Eastern Meetings 647, Econometric Society.
    2. Jing-Yuan, Chiou, 2012. "In the shadow of giants," MPRA Paper 37033, University Library of Munich, Germany.
    3. Aoki, Reiko & 青木, 玲子 & Kao, Tina, 2012. "Protection of basic research and R&D incentives in an international setting," CIS Discussion paper series 563, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.

    More about this item

    Keywords

    utility requirement; basic research; patentability; innovation;
    All these keywords.

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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