TY - JOUR
T1 - Ancillary patent markets and the firm
AU - Burk, Dan L.
AU - McDonnell, Brett H.
PY - 2014
Y1 - 2014
N2 - Intellectual property frequently carries with it exclusive rights not only over the primary subject matter of the rights granted, but also over ancillary subject matter that is not within the definition of the primary grant, as for example in the patent doctrine of contributory infringement. Previous scholars have explored the potential for intellectual property rights to affect the size and structure of firms by mitigating transaction costs both between firms and within firms. Here we extend that framework to consider the impact of ancillary rights, which we expect to have their own effects on a firm's 'make or buy' decision. Ancillary rights may place an intellectual property holder in a position to license production of complementary products or components to other firms. In some instances the absence of ancillary rights may prompt firms to vertically integrate, in order to bring such transactions in house. We anticipate that doctrines such as contributory infringement impact employee mobility out of firms holding patents. We also anticipate that contributory infringement rights will tend to lower overall transaction costs, although this may vary with the circumstances in a particular industry.
AB - Intellectual property frequently carries with it exclusive rights not only over the primary subject matter of the rights granted, but also over ancillary subject matter that is not within the definition of the primary grant, as for example in the patent doctrine of contributory infringement. Previous scholars have explored the potential for intellectual property rights to affect the size and structure of firms by mitigating transaction costs both between firms and within firms. Here we extend that framework to consider the impact of ancillary rights, which we expect to have their own effects on a firm's 'make or buy' decision. Ancillary rights may place an intellectual property holder in a position to license production of complementary products or components to other firms. In some instances the absence of ancillary rights may prompt firms to vertically integrate, in order to bring such transactions in house. We anticipate that doctrines such as contributory infringement impact employee mobility out of firms holding patents. We also anticipate that contributory infringement rights will tend to lower overall transaction costs, although this may vary with the circumstances in a particular industry.
KW - Contributory infringement
KW - Indirect infringement
KW - Intellectual property
KW - Patents
KW - Theory of the firm
KW - Transaction cost analysis
UR - http://www.scopus.com/inward/record.url?scp=84905920516&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84905920516&partnerID=8YFLogxK
U2 - 10.4337/qmjip.2014.02.02
DO - 10.4337/qmjip.2014.02.02
M3 - Article
AN - SCOPUS:84905920516
SN - 2045-9807
VL - 4
SP - 118
EP - 138
JO - Queen Mary Journal of Intellectual Property
JF - Queen Mary Journal of Intellectual Property
IS - 2
ER -