Amalia Yiannaka, Murray Fulton

The paper examines the relationship between the innovator’s patenting and patent breadth decisions as well as how these two decisions affect, and are affected by, the innovator’s ability to enforce her patent rights. An important feature of the model is that the entrant may be able, by his choice of location in product space, to affect the innovator’s decision to defend her patent. An interesting finding of the paper is that the innovator might find it optimal to patent her innovation even when she chooses to not defend her patent by invoking a trial when patent infringement occurs. The paper also shows that, in most cases, the greater is the entrant’s R&D effectiveness, the smaller is the innovator’s incentive to patent her product. If patenting occurs, however, the greater is R&D effectiveness, the greater is the patent breadth that could be chosen without triggering infringement.

Copyright 2005 by Amalia Yiannaka and Murray Fulton. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies.