International Conference on the Economics of Innovation and Patenting at ZEW


Prof. Mike Scherer (Harvard University) on Theoretical Analysis of the Optimal Length of Patent Protection Periods

The ZEW Research Department "Industrial Economics and International Management" and the Mannheim Centre for Competition and Innovation (MaCCI) jointly hosted the sixth "Conference on the Economics of Innovation and Patenting" in Mannheim on July 2 and 3, 2015. The event was attended by about 70 international participants and featured four high-profile keynote speakers, who discussed recent research findings on patent systems, incentives for R&D, and the interplay between government-funded and private research.

Held biannually at ZEW, the conference has become a major international event in the field of innovation economics and patenting. Nearly 170 research papers were submitted, with a growing share of contributions coming from Asian countries. The scientific committee selected 45 papers for presentation. The papers presented at the conference addressed a wide range of topics in theoretical as well as empirical research. For instance, parallel sessions were devoted to the leeway regarding anti-competitive practices in patent law and to the financing of innovations. In addition, several presentations addressed current issues related to the economics of innovation, including the assessment of innovation policy instruments, research collaborations between firms and scientific institutions, and the efficiency of basic research.

Presentation of the results of the EU projects WWWforEurope and CRE8TV.EU

A special feature of this year's conference were three extra sessions, in which ZEW researchers presented current findings from two large EU-funded projects. ZEW is a cooperation partner in in both projects.

WWWforEurope ("Welfare, Wealth, and Work for Europe") is a research project bringing together about 40 European collaboration partners who are engaged in research on globalisation, demographic change, and sustainable, inclusive growth. The second project, CRE8TV.EU, is dedicated to innovations in the European creative industries. The conference provided an excellent opportunity for project partners to exchange ideas and discuss results.

Four high-profile keynote speakers on patent law and the effect of radical innovations

Professor Mike Scherer from Harvard University delivered the first keynote speech, in which he presented a theoretical analysis of the optimal length of patent protection periods. He particularly emphasized the first-mover advantage that innovators have over potential imitators on the market, which often remains unconsidered in existing models. Mike Scherer pointed out the conditions that have to be met in order to create a sufficient first-mover advantage, rendering a state-sanctioned monopoly like patent protection unnecessary as an incentive for innovations.

Alberto Galasso, Associate Professor at the University of Toronto, presented his findings on the relationship between patent rights and cumulative innovations. In his work, he analysed whether the removal of patent protection through court invalidation is more conducive to subsequent innovations than patents that remain valid. The results show that, in general, patents do not block follow-on innovations. Patent protection, however, can have negative effects under certain conditions, which implies that there is still room for improvement in patent law.

On the second day, Professor Reinhilde Veugelers from KU Leuven presented an approach for measuring radical innovations on the basis of patent data. Researchers have always been interested in particularly novel and creative innovations that have a high technological and economic potential. The classification of such innovations in patent databases, however, turns out to be difficult. Her approach thus addressed a highly practical problem of empirical research on innovation.

Jordi Jaumandreu, PhD, Senior Researcher at Boston University, concluded the event with his keynote speech on the relationship between innovations and employment. Innovations do have the potential to destroy jobs, Jaumandreu said. At the same time, innovations also create jobs in new, prospering sectors. Theoretical models and data from the European Community Innovation Surveys, partly collected at ZEW, show that product innovations clearly have a positive effect when it comes to the creation of new jobs.