Abstract:
We provide an economic analysis of two types of research exemptions: (1) experimentation
and research on the patented subject matter, and (2) academic (or non-commercial)
research with the patented invention. We find that exemption for research on improving or
inventing-around the subject matter makes good economic sense in the context of perpetual
R & D competition, although it may not in the context of pioneer-follower innovation framework.
The best approach might be to provide broad research exemption on the research on
subject matter (more generally exemption for research using the knowledge disclosed in the
invention that is useful for improving its subject matter), while stronger protection is provided
for a pioneering invention in the product market in terms of the breadth of claims.
Exemption for experimentation on the subject matter for the purpose of verification of inventions
also is sensible. On the other hand, we find that research exemption is a blunt tool for
promoting academic research, with a negative effect on the development of research tool. In
addition, it is not clear whether research exemption is necessary for efficient and coordinated
price discrimination in favor of academic researches.