2009/10/12 by James Bessen, Eric Maskin · 2 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Firm Innovation and Growth #Intellectual Property and Patents #Private Equity and Venture Capital
paper · doi:10.1111/j.1756-2171.2009.00081.x
openalex publication_date 2009/10/12 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/30
We argue that when innovation is “sequential” (so that each successive invention builds in an essential way on its predecessors) and “complementary” (so that each potential innovator takes a different research line), 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.