Title

Tradable Patent Rights: A New Approach to Innovation

Document Type

Article

Abstract

Patent thickets may inefficient retard cumulative innovation. This paper explores two alternative mechanisms that may be used to weed out patent thickets. Both mechanisms are intended to reduce the number of patents in our society. The first mechanism we discuss is price based regulation of patents through a system of increasing renewal fees. The second and more innovative mechanism is quantity based regulation through the establishment of a system of Tradable Patent Rights. The formalization of tradable patent rights would essentially create a secondary market for patent permits in which patent protection will be bought and sold.

Date of Authorship for this Version

September 2007

Keywords

permits, thickets, license fees, licensing, social costs, infringement, renewal fees, tragedy of the commons, enforcement