Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/89658 
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper No. 4486
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
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.
Subjects: 
patents
trade secrets
dynamic protection of innovation
intellectual property rights
JEL: 
O31
O34
Document Type: 
Working Paper
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