The Role of Patents for Bridging the Science to Market Gap

This paper examines an ex-post rationale for the patenting of scienti…c discoveries. In this model, scientist do not know which …rms can make use of their discoveries, and …rms do not know which scienti…c discoveries might be useful to them. To bridge this gap, either or both sides need to engage in costly search activities. Patents determine the appropriability of scienti…c discoveries, which a¤ects the scientists’and …rms’willingness to engage in search. Patents increase (decrease) dissemination when scientists’(…rms’) search is su¢ ciently elastic. The model also examines the role of universities. Patents facilitate the delegation of search activities to the universities’ technology transfer o¢ ces, which enables e¢ cient specialization. Rather than distracting scientists from doing research, patenting may be a complement to doing research. Paper prepared for the NBER Conference on “Academic Science and Entrepreneurship.”I would like to thank the conference organizers, Adam Ja¤e, Josh Lerner, Scott Stern and Marie Thursby, as well as Wes Cohen, Nancy Gallini, Ralph Winter, and seminar participants at the preliminary NBER workshop (Boston) and the University of British Columbia (Vancouver), for their helpful comments. All erros are mine. 2053 Main Mall, Vancouver, B.C., V6T 1Z2. Tel: (604) 822 8476. Fax: (604) 822 8477. Email: [email protected]. The latest version of this paper can be downloaded from the website: http://strategy.sauder.ubc.ca/hellmann/.