Social and Behavioral Sciences Commons^™

The Impact Of Uncertainty Intellectual Property Rights On The Market For Ideas: Evidence From Patent Grant Delays, Joshua S. Gans, David H. Hsu, Scott Stern

Joshua S Gans

This paper considers the impact of the intellectual property (IP) system on the timing of cooperation/licensing by start-up technology entrepreneurs. If the market for technology licenses is efficient, the timing of licensing is independent of whether the patent has already been granted, and productive efficiency considerations will determine license timing (which likely will be as early as possible after invention). In contrast, the need for disclosure of unprotected knowledge on the part of the inventor, asymmetric information between the licensor and potential licensees, or search costs may retard efficient technology transfer. In these cases, reductions in uncertainty surrounding the scope …