Friday, March 25, 2011
Posted by D. Daniel Sokol
Dirk Czarnitzki, Centre for European Economic Research (ZEW), Catholic University of Leuven (KUL), Katrin Hussinger, Centre for European Economic Research (ZEW), Maastricht University - Department of Organization & Strategy, Catholic University of Leuven (KUL), and Cédric Schneider, Copenhagen Business School - Department of Economics address R&D Collaboration with Uncertain Intellectual Property Rights.
ABSTRACT: Patent pendencies create uncertainty in research and development (R&D) collaboration agreements, resulting in a threat of expropriation of unprotected knowledge by potential partners, reduced bargaining power and enhanced search costs. In this paper, we show that - depending of the type of partner - uncertain intellectual property rights (IPR) lead to reduced collaboration between firms and may hinder the production of knowledge. This has implications for technology policy as R&D collaborations are exempt from anti-trust legislation in order to increase R&D in the economy. We argue that a functional IPR system is needed for successful utilization of this policy.