The new Industry and Innovation Special Issue on Trademarks and their Role in Innovation, Entrepreneurship and Industrial Organization is out!
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Articles in Industry and Innovation 27/1-2:
Editorial: why and when do firms trademark? Bridging perspectives from industrial organisation, innovation and entrepreneurship
By: Guest editors, Carolina Castaldi, Joern Block & Meindert J. Flikkema
On the price elasticity of demand for trademarks
By: Gaétan de Rassenfosse
Abstract: One underexplored factor directly affecting firms’ use of trademarks relates to the fees associated with obtaining a mark. This paper provides econometric estimates of the fee elasticity of demand for trademark applications. Using a panel of monthly international trademark applications, I find that a 10-percent increase in fees leads to a 2.5–4.0-percent decrease in applications. The econometric analysis also highlights that trademark filings react strongly to economic activity. The results bear implications for literature on the value of trademarks and for the use of trademarks as innovation indicator. Specifically, low elasticity estimates suggest that trademarks provide significant economic value to their owners relative to their costs. However, one must exercise caution when comparing trademark numbers across countries to the extent that fees might differ substantially.
a distinctive sign to an exchangeable asset: exploring the U.S. market for trademark licensing
By: Edoardo Ferrucci, Maria Isabella Leone, Manuel Romagnoli & Andrea Toros
Abstract: A remarkable growth in the value of trademark licencing has been recently recorded. Our paper contributes to the understanding of this under-explored phenomenon using a dataset newly released by the USPTO. Our study analyses the evolution of licencing activities in the U.S. during the 2003–2017 period, the characteristics of these trademarks and agreements, and certain features of the licencing parties involved. We found that licencing activities varied considerably during these years. They were usually signed between two parties only, and, on average, they involved more than one trademark. Excluding under-reporting effect, the analyses reveal that a large portion of heterogeneity in licencing activity is due to the NICE international classes associated with each trademark. Indeed, trademark licencing agreements appear to be unevenly distributed across these classes, suggesting that this activity and the way it is carried out is correlated with the market to which the licenced trademark refers.
Are two better than one? Modelling the complementarity between patents and trademarks across industries
By: Patrick Llerena & Valentine Millot
Abstract: Intellectual property (IP) rights are a major component of firms’ strategies to appropriate the benefits of their innovations. This paper aims at assessing the interactions between two types of IP rights, namely patents and trademarks. We first model the effect of these two types of IP rights on the returns of innovations for firms. Based on a supermodularity analysis, we then show that the complementarity between trademarks and patents varies according to the characteristics of the market. Depending on the levels of advertising’s spillovers and depreciation rate, trademarks are found to be complementary or not to patents. Finally, based on a data set encompassing the IP activity of a sample of publicly traded firms among the top corporate R&D investors worldwide, we find that patents and trademarks are complementary in chemical and pharmaceutical sectors, but not in Information and Communication Technologies (ICT) sectors.
Abstract: The benefits of an IP strategy for an innovative project that combines both patenting and trademarking are compared to those of patenting alone. The results of the proposed econometric analysis of patents indicate that a strategy that pairs patenting and trademarking almost doubles patent value. The validity of this result was confirmed by examining several patentee demographic characteristics and an extensive set of patent value indicators regarding breadth and technology potential, prior art and patent background, filing and procedural aspects of a patent and IP usage mode. Quite interesting, when the holder of a utility patent also obtains a design patent, rather than opting for a trademark, there is no enhancement of the premium value.
Abstract: This study examines the effect of intellectual property rights (IPR) on firms’ geographic overlap strategy of external technology search (ETS) compared to rivals. I reveal that firms are able to realise less intensity of geographic overlap in ETS locations compared to competitors and that this outcome is a function of the breadth of their upstream (generality of patents) and downstream (diversification of trademarks) IPR tools. Accordingly, I conclude that both covariates influence the spatial isolation of ETS vis-à-vis competitors. The effect of generality of patents on isolation, however, is more pronounced in comparison with diversification of trademarks at strategic technology alliances, meanwhile the reverse scenario is true at acquisitions. I also reveal relevant findings about resource-rich organisations defined as those with the broadest portfolio of such up- and downstream IPR assets within the industry.
do innovators not apply for trademarks? The role of information asymmetries and collaborative innovation
By: Suma Athreye & Claudio Fassio
Abstract: This paper analyses the underlying reasons why innovators do not apply for trademarks for all of their valuable inventions. Using a unique database of UK innovations linked to innovative firms, the empirical analysis highlights the many ways that firms can alleviate information asymmetries and the constraints imposed by collaborative innovation without taking recourse to trademarks. When information asymmetries are not at stake, i.e. when firms use an already existing trademark for their innovations or when they use intermediaries for its distribution, trademarks no longer serve their purpose, leading firms to avoid using it for their innovations. Open innovation also decreases the incentive to trademark, especially when the innovative process involves users, mainly because of property rights issues or because the innovator prefers to use the clients’ own distribution channels.
and their association with Kirznerian entrepreneurs
By: Serhiy Lyalkov, Mónica Carmona, Emilio Congregado, Ana Millán & José María Millán
Abstract: Although trademarks are the most widely used form of Intellectual Property Rights (IPRs) by firms across all economic sectors worldwide, this indicator is a much less exploited information resource in empirical analysis compared with patents. Our work addresses this gap by investigating the relationship between trademark registration and entrepreneurial activity using data for 33 European countries. Our empirical results show a positive and significant relationship between the share of the self-employed workforce in a given country that can be considered ‘entrepreneurial’ – which we associate with the share of Kirznerian entrepreneurs – and trademark registration at the country level. These results have important implications for scholars, practitioners and policymakers, which are discussed in this work.
Innovation activities and business cycles: are trademarks a leading indicator?
By: Charles A. W. deGrazia, Amanda Myers & Andrew A. Toole
Abstract: Despite the widespread use of economic information to anticipate changes in business conditions, innovation metrics are not considered to be leading indicators. We argue that aggregate trademark data reflect firm-level choices that can help predict business cycles. In addition to establishing the conceptual basis for considering trademarks, our statistical evaluations, using turning point analysis and a novel machine learning method, find that trademark filings for product and service offerings in commercial use outperform many of the conventional leading indicators. Our work suggests that including trademark metrics in composite indexes could improve recession forecasting performance.