Valuing Intellectual Property Rights in an Imperfectly Competitive Market: A Biopharming Application

Small research firms developing biotechnology applications often focus on establishing intellectual property rights (IPRs), which can then be sold to more established firms with existing market channels. This paper presents a method for valuing the IPRs for an innovation that lowers product production costs below those associated with the patented process of a monopolist. The application to Glucocerebrosidase enzyme from transgenic tobacco suggests an IPRs value of about $1.75 billion. Despite the innovator’s market power, significant surplus gains also accrue to consumers. Further, U.S. antitrust laws that prohibit IPRs acquisition by the current monopolist increase consumer welfare by almost 50%.


Issue Date:
2009-12
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/56641
Published in:
Journal of Agricultural and Applied Economics, Volume 41, Number 3
Page range:
571-583
Total Pages:
13
JEL Codes:
D23; M13; D43; D60




 Record created 2017-04-01, last modified 2017-08-25

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)