Intellectual property – the capital of the knowledge economy

Kate Proto

“There are two primary tools that exist to encourage innovation, from a public policy perspective: intellectual property policy and competition policy,”says Aviv Nevo, professor of marketing at Kellogg and an economics professor at the Weinberg College of Arts and Sciences. With more than 300,000 patents issued by the U.S. Patent Office in 2014, it’s no wonder both economists and business leaders seek sound policy in this domain.

To understand how such policies affect consumers’ lives, look to the cell phone in your pocket. Research shows that more than 25 percent of a smartphone’s price ($120 of the cost of a hypothetical $400 mobile phone) may come from patent royalties. That’s because a patent doesn’t grant an inventor exclusive rights. Rather, the infringing parties pay royalties to the patent-holder in lieu of ceasing their production. For technology firms in particular, paying such royalties has become just another cost of doing business.

These and other pressing policy issues were explored in depth when Kellogg hosted “Intellectual property – the capital of the knowledge economy,” a panel discussion moderated by Nevo that included 2014 Nobel Prize winner Jean Tirole and Carl Shapiro, a business strategy professor from the Haas School of Business at the University of California at Berkeley. Speaking to an audience of scholars and students from across the university, the trio discussed how patents and property rights could be structured to allow for innovation, productivity and growth.




Haas Professor Carl Shapiro on Patenting 101

---

Nobel Laureate Jean Tirole on patent holders as gatekeepers

---

Haas Professor Carl Shapiro on the impact of patent royalties

---

Haas Professor Carl Shapiro on preventing patent trolls from tanking your startup