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Dynamic Protection of Innovations through Patents and Trade Secrets

Author

Listed:
  • Paul Belleflamme
  • Paul Bloch
Abstract
This paper analyzes the optimal protection strategy for an innovator of a complex innovation who faces the risk of imitation by a competitor. We suppose that the innovation can be continuously fragmented into sub-innovations. We characterize the optimal mix of patent and trade secrets when the innovator faces a strict novelty requirement and can only patent a fraction of the innovation once. We also study the optimal dynamic patenting policy in a soft novelty regime, when the innovator can successively patent different fragments of the process. We compare a regime with prior user rights, when the innovator can use the secret part of the process, even when it is patented by an imitator with a regime without prior user rights.

Suggested Citation

  • Paul Belleflamme & Paul Bloch, 2013. "Dynamic Protection of Innovations through Patents and Trade Secrets," CESifo Working Paper Series 4486, CESifo.
    • Handle: RePEc:ces:ceswps:_4486
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Sim, Kyoungbo, 2021. "Optimal use of patents and trade secrets for complex innovations," International Journal of Industrial Organization, Elsevier, vol. 79(C).
    2. Hermans, Ben & Leus, Roel & Looy, Bart Van, 2023. "Deciding on scheduling, secrecy, and patenting during the new product development process: The relevance of project planning models," Omega, Elsevier, vol. 116(C).
    3. Aineas Kostas Mallios, 2024. "Licensing and secrecy under imperfect intellectual property protection," Theory and Decision, Springer, vol. 97(3), pages 527-552, November.

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    More about this item

    Keywords

    patents; trade secrets; dynamic protection of innovation; intellectual property rights;
    All these keywords.

    JEL classification:

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

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