Review of Law & Economics
Editor-in-Chief: Parisi, Francesco
Ed. by Cooter, Robert D. / Gómez Pomar, Fernando / Kornhauser, Lewis A. / Parchomovsky, Gideon / Engel, Christoph
SCImago Journal Rank (SJR) 2015: 0.196
Source Normalized Impact per Paper (SNIP) 2015: 0.401
Impact per Publication (IPP) 2015: 0.244
Trade Secret vs. Broad Patent: The Role of Licensing
1Università di Torino, Italy
2Università di Torino, Italy
Citation Information: Review of Law & Economics. Volume 2, Issue 2, Pages 209–221, ISSN (Online) 1555-5879, DOI: 10.2202/1555-5879.1069, September 2006
- Published Online:
We present a simple model wherein a patents regime is inferior to a trade secrets system, meaning that when private returns from innovation under the two regimes are the same, society will be better off if the innovator chooses not to patent. In our model, trade secret licensing is envisaged and the inferiority of patents depends on the lack of an independent invention defense in patent law, while such a defense currently exists in secrecy and copyright law. Thus, although secrecy is superior to patents, it is not superior to other types of formal intellectual property rights where independent invention is allowed (such as copyrighted software).
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