Hall, Helmers, Rogers, and Sena (2014)

From Copyright EVIDENCE

Advertising Architectural Publishing of books, periodicals and other publishing Programming and broadcasting Computer programming Computer consultancy Creative, arts and entertainment Cultural education

Film and motion pictures Sound recording and music publishing Photographic activities PR and communication Software publishing (including video games) Specialised design Television programmes Translation and interpretation

1. Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare 2. Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)? 3. Harmony of interest assumption between authors and publishers (creators and producers/investors) 4. Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption) 5. Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)

A. Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right) B. Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction) C. Mass digitisation/orphan works (non-use; extended collective licensing) D. Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability) E. Fair remuneration (levies; copyright contracts) F. Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)

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
Key Related Studies:
Discipline:
Linked by:
About the Data
Data Description: Review of empirical literature on use of formal and informal IP by firms. 132 references.
Data Type: Secondary data
Secondary Data Sources:
Data Collection Methods:
Data Analysis Methods:
Industry(ies):
Country(ies):
Cross Country Study?: Yes
Comparative Study?: Yes
Literature review?: Yes
Government or policy study?: No
Time Period(s) of Collection:
  • Non stated
Funder(s):
  • Intellectual Property Office

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

Coverage of Fundamental Issues
Issue Included within Study
Relationship between protection (subject matter/term/scope) and supply/economic development/growth/welfare
Green-tick.png
Relationship between creative process and protection - what motivates creators (e.g. attribution; control; remuneration; time allocation)?
Harmony of interest assumption between authors and publishers (creators and producers/investors)
Effects of protection on industry structure (e.g. oligopolies; competition; economics of superstars; business models; technology adoption)
Green-tick.png
Understanding consumption/use (e.g. determinants of unlawful behaviour; user-generated content; social media)
Green-tick.png
Coverage of Evidence Based Policies
Issue Included within Study
Nature and Scope of exclusive rights (hyperlinking/browsing; reproduction right)
Green-tick.png
Exceptions (distinguish innovation and public policy purposes; open-ended/closed list; commercial/non-commercial distinction)
Mass digitisation/orphan works (non-use; extended collective licensing)
Licensing and Business models (collecting societies; meta data; exchanges/hubs; windowing; crossborder availability)
Green-tick.png
Fair remuneration (levies; copyright contracts)
Enforcement (quantifying infringement; criminal sanctions; intermediary liability; graduated response; litigation and court data; commercial/non-commercial distinction; education and awareness)
Green-tick.png

Datasets

Sample size: 132
Level of aggregation: Publication
Period of material under study: Non stated