Home Business & Economics The Failure of a Pure Patent Market
Article
Licensed
Unlicensed Requires Authentication

The Failure of a Pure Patent Market

  • Christian Bessy EMAIL logo
Published/Copyright: September 14, 2023

Abstract

This paper presents an analysis of the movement to make patents a new asset class, and its relative failure. Our thesis is that this creation is largely dependent on the construction of a market devoted to transactions in patents, and not just in technology licenses, and on the emergence of new intellectual property intermediaries akin to finance, whose activity must nevertheless be regulated. Our analysis is based on the various patent valuation conventions that underpin its institutionalization and the variety of its uses.

JEL Classification: O3; K2; L5

Corresponding author: Christian Bessy, IDHES, ENS Paris-Saclay, Paris, France, E-mail:

References

Adam, J., & Lerner, J. (2004). Innovation and its discontents: How our broken patent system is endangering innovation and progress, and what to do about it. Princeton University Press.Search in Google Scholar

Alfonso, G., Paola, G., & Alessandra, L. (2007). The market for patents in Europe. Research Policy, 36, 1163–1183. https://doi.org/10.1016/j.respol.2007.07.006 Search in Google Scholar

Allison, J., Lemley, M., & Schwartz, D. (2017). How often do non-practicing entities win patent suits? https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2750128 10.31235/osf.io/wrebmSearch in Google Scholar

Anand, B., & Khanna, T. (2000). Intellectual property rights and contract structure. The Journal of Industrial Economics, 58, 103–135.10.1111/1467-6451.00114Search in Google Scholar

Appel, I., Farre-Mansa, J., & Simintzi, E. (2019). Patent trolls and startup employment. Journal of Financial Economics, 133(3), 708–725. https://doi.org/10.1016/j.jfineco.2019.01.003 Search in Google Scholar

Baudry, J. (2014). Une histoire de la propriété intellectuelle. Les brevets d’invention en France, 1791–1844: acteurs, catégories, pratiques [PhD dissertation]. Paris EHESS.Search in Google Scholar

Benassi, M., & Di Minim. (2009). Playing in between: Patent brokers in markets for technology. R&D Management, 39, 68–86. https://doi.org/10.1111/j.1467-9310.2008.00537.x Search in Google Scholar

Benassi, M., & Martin-Sachez, M. (2022). Patent intermediaries. New actors in the intellectual property market. Palgrave Macmillan Cham.10.1007/978-3-031-10310-0Search in Google Scholar

Bessen, J., & Meurer, M. (2012). The direct costs from NPE disputes, WP n°12-34. Boston University School of Law.10.2139/ssrn.2091210Search in Google Scholar

Bessy, C. (2006). Organisations intermédiaires et accords de licence de technologie. Revue d’Économie Industrielle, 115, 71–104. https://doi.org/10.4000/rei.483 Search in Google Scholar

Bessy, C. (2022). L’expropriation par le droit. Propriété intellectuelle, valeur et travail. Editions de l’EHESS.Search in Google Scholar

Bessy, C., & Brousseau, E. (1997). Brevet, protection et diffusion des connaissances: Une relecture néo-institutionnelle des propriétés de la règle de droit. Revue d’Économie Industrielle, 79, 233–254. https://doi.org/10.3406/rei.1997.1663 Search in Google Scholar

Bessy, C., & Brousseau, E. (1998). Licensing of technology: Various contracts for diverse transactions. International Review of Law and Economics, 18, 451–489. https://doi.org/10.1016/s0144-8188(98)00018-0 Search in Google Scholar

Bessy, C., Brousseau, E., & Saussier, S. (2008). Payment schemes in technology licensing agreements: A transaction cost approach. Archives SSRN. http://ssrn.com/abstract=1259394 10.2139/ssrn.1259394Search in Google Scholar

Cassier, M. (2018). Between financial capitalism and humanitarian concerns: Value, price and profits of hepatitis C antivirals and artemisinin-based combinations for malaria. WP INSERM.Search in Google Scholar

Caves, E., Crookel, H., & Killing, P. J. (1983). The imperfect market for technology licenses. Oxford Bulletin of Economics & Statistics, 45, 249–267. https://doi.org/10.1111/j.1468-0084.1983.mp45003002.x Search in Google Scholar

Chiapello, E. (2015). Financiarisation de l’évaluation. Etudes humaines, 38, 13–35. https://doi.org/10.1007/s10746-014-9337-x Search in Google Scholar

Coriat, B., & Orsi, F. (2002). Establishing a new regime of intellectual property rights in the United States, origins, content problems. Research Policy, 31, 1491–1507. https://doi.org/10.1016/s0048-7333(02)00078-1 Search in Google Scholar

Cristina, O., Giuseppe, S., & Elisa, U. (2014). Selling patents at auctions: An empirical analysis of patent value. Industrial and Corporate Change, 24(2), 417–438. https://doi.org/10.1093/icc/dtu015 Search in Google Scholar

Geradin, D., Layne-Farrar, A. & Padilla, A. J. (2012). Elves or trolls? The role of non-practicing patent owners in the innovation economy. Industrial and Corporate Change, 21(1), 73–94. https://doi.org/10.1093/icc/dtu015 Search in Google Scholar

Guellec, D., Madiès, T., & Prager, J.-C. (2010). Le marché des brevets dans l’économie de la connaissance. Rapport pour le Conseil d’Analyse économique.Search in Google Scholar

Haber, S., & S. Werfel (2016). Patent trolls as financial intermediaries? Experimental evidence. Economics Letters, 149, 64–66. https://doi.org/10.1257/jep.27.1.45 Search in Google Scholar

Hagiu, A., & Yoffie, D. (2013). The new patent intermediaries: Platforms; defensive aggregators, and super-aggregators. The Journal of Economic Perspectives, 27(1), 45–65. https://doi.org/10.1257/jep.27.1.45 Search in Google Scholar

Hautcoeur, P.-C., & Riva, A. E. (2013). What financiers usually do, and what we can learn from history. Accounting, Economics, and Law, 3(3), 313–331. https://doi.org/10.1515/ael-2013-0034 Search in Google Scholar

Hsu, D., & Ziedonis, R. (2013). Resources as dual sources of advantage: Implications for valuing entrepreneurial-firms patents. Strategic Management Journal, 34, 761–781. https://doi.org/10.1002/smj.2037 Search in Google Scholar

Jarosz, J., Heider, R., Bazelon, C., Bieri, C., & Hess, P. (2010). Patent auctions: How far have we come? Les Nouvelles, 11–30.Search in Google Scholar

Lallement, R. (2010). Marchés des technologies et droits de propriété intellectuelle: éléments de cadrage statistique et enseignements d’expériences étrangères. In D. Guellec, T. Madiès, & J.-C. Prager (Eds.), Le marché des brevets dans l’économie de la connaissance, rapport pour le Conseil d’analyse économique (pp. 143–174).Search in Google Scholar

Lamoreaux, N., & Sokoloff, K. (2002). Intermediaries in the US Market for technology: 1870–1920. NBER. Working Paper 9017.10.3386/w9017Search in Google Scholar

Lazega, E. (2016). Réseaux et régulation: Pour un institutionnalisme néo-structural. Revue de la Régulation, 19(1). https://doi.org/10.4000/regulation.11767 Search in Google Scholar

Lemley, M. A. (2007). Are universities patent trolls? Fordham intellectual property. Media & Entertainment Law Journal, 18, 611–631.Search in Google Scholar

Malki, E. (1997). Intellectual property and the valuation of biotechnology companies: GEN-dex versus dow jones. Working Paper ewp-fin/9709002, Economic Working Paper Archive.10.2139/ssrn.43181Search in Google Scholar

McClure, I. (2015). From a patent market for Lemons to a market place for patents: Benchmarking IP in its evolution to asset class status. Chapman Law Review, 759–798.Search in Google Scholar

Merges, R. (1996). Contracting into liabilty rules: Intellectual property rights and collective rights organizations. California Law Review, 84(5), 1293–1393. https://doi.org/10.2307/3480996 Search in Google Scholar

Michel, C. (2017). L’emprise des marchés, comprendre leur fonctionnement pour pouvoir les changer. La Découverte.Search in Google Scholar

Monk, A. (2009). The emerging market for intellectual property: Drivers, restrainers, and implications. Journal of Economic Geography, 4(9), 469–491, https://doi.org/10.1093/jeg/lbp003 Search in Google Scholar

Orléan, A. 2014 (2011). The empire of value. A new foundation for economics, MIT Press.10.7551/mitpress/9780262026970.001.0001Search in Google Scholar

Pénin, J. (2012). Strategic uses of patents in markets for technology: A story of fabless firms, brokers and trolls. Journal of Economic Behavior & Organization, 84, 633–641. https://doi.org/10.1016/j.jebo.2012.09.007 Search in Google Scholar

Pierre, B. (2019). Le brevet fort dans la loi Pacte. https://www.village-justice.com/articles/brevet-fort-dans-loi-pacte-quels-impacts-pour-les-inventeurs-francais,31760.html Search in Google Scholar

Rapport Cour des comptes européenne. (2019). Rapport spécial sur le capital risque. https://op.europa.eu/webpub/eca/special-reports/venture-capital-17-2019/fr/ Search in Google Scholar

Rosenberg, N. (1990). Why do firms do basic research (with their own money)? Research Policy, 19, 165–174. https://doi.org/10.1016/0048-7333(90)90046-9 Search in Google Scholar

Steen, K. (2001). Patents, patriotism, and « skilled in the Art » USA v. The Chemical Foundation, Inc., 1923–1926. The University of Chicago Press on behalf of The History of Science Society, 92(1), 91–122.10.1086/385041Search in Google Scholar

Wang, A. (2010). Rise of the patent intermediaries. Berkeley Journal Law Journal, 25/1, 159–200.Search in Google Scholar

Yavas, A. (1992). Markets makers versus matchmakers. Journal of Financial Intermediation, 2(1), 35–58.10.1016/1042-9573(92)90019-ASearch in Google Scholar

Received: 2022-10-21
Accepted: 2023-08-30
Published Online: 2023-09-14

© 2023 CONVIVIUM, association loi de 1901

Downloaded on 22.1.2026 from https://www.degruyterbrill.com/document/doi/10.1515/ael-2022-0079/html
Scroll to top button