Hall, Helmers, Rogers, and Sena (2014)
From Copyright EVIDENCE
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Source Details
Hall, Helmers, Rogers, and Sena (2014) | |
Title: | The choice between formal and informal intellectual property: a review |
Author(s): | Hall, B., Helmers, C., Rogers, M., Sena, V. |
Year: | 2014 |
Citation: | Hall, B., Helmers, C., Rogers, M., & Sena, V. (2014). The choice between formal and informal intellectual property: a review. Journal of Economic Literature, 52(2), 375-423. |
Link(s): | Definitive , Open Access |
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About the Data | |
Data Description: | Review of empirical literature on use of formal and informal IP by firms. 132 references. |
Data Type: | Secondary data |
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Industry(ies): | |
Country(ies): | |
Cross Country Study?: | Yes |
Comparative Study?: | Yes |
Literature review?: | Yes |
Government or policy study?: | No |
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Abstract
The article surveys the economic literature, both theoretical and empirical, on the choice of intellectual property protection by firms. The focus is on the trade-offs between using patents and disclosing versus the use of secrecy, although we also look briefly at the use of other means of formal intellectual property protection.
Main Results of the Study
- The most robust finding is heterogeneity in the use of patents across industries* Firms use both patents and trade secrets to protect valuable inventions and, contrary to a commonly encountered belief, patents may not necessarily protect a company’s most valuable inventions. Such inventions may be kept secret despite being patentable.* Only a small fraction of innovative companies relies on patents to protect their inventions. Firms use a range of mechanisms—such as secrecy or first mover advantage—by which they appropriate rewards to invention and innovation and the available empirical evidence suggests that firms rely on these alternative mechanisms much more than on formal IP* Invention and innovation do occur even if firms cannot access, or choose not to use, the IP system. * Most firms use no IP protection at all. * Firms tend to treat various kinds of IP protection as complements, in the sense that use of one makes it highly probably they will use the others
Policy Implications as Stated By Author
- Most of the theoretical work concentrates on the choice of patents versus secrecy. The focus on patents is too narrow, as trademarks and copyright are far more widely used formal IP rights than patents. Similarly, secrecy is not the most effective and frequently used informal appropriation method. The narrow focus of the theoretical literature creates a gap between the theoretical models and the empirical work in this area* From a policy point of view, the lack of a better theoretical understanding of the trade-off that companies face when choosing between the large range formal and informal IP methods represents a challenge.* The available empirical evidence strongly suggests that, in most industries, patents are not seen as an effective tool to appropriate returns to innovation. For policy, an improved understanding of possible interactions and overlaps between the different mechanisms would be useful.* Further research in the form of additional crosssectional survey evidence may not be the best way forward. The small literature that has used the combination of invention-level data with exogenous changes in the legal regimes governing the patent–secrecy trade-off offers the most insightful findings
Coverage of Study
Datasets
Sample size: | 132 |
Level of aggregation: | Publication |
Period of material under study: | Non stated |