Patent Buyouts: A Mechanism for Encouraging Innovation

peter.suber's bookmarks 2019-10-14


Abstract:  In 1839 the French government purchased the Daguerreotype patent and placed it in the public domain. Such patent buyouts could potentially eliminate the monopoly price distortions and incentives for rent-stealing duplicative research created by patents, while increasing incentives for original research. Governments could offer to purchase patents at their estimated private value, as determined in an auction, times a markup equal to the typical ratio of inventions' social and private value. Most patents purchased would be placed in the public domain, but to induce bidders to reveal their valuations, a few would be sold to the highest bidder.



10/14/2019, 06:49

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Date tagged:

10/14/2019, 10:49

Date published:

11/01/1998, 05:49