research policy
ELSEVIER Research Policy 26 (1997) 391-403

Patents, licensing, and market structure in the chemical industry
Ashish Arora *
Heinz School of Public Policy and Management, Carnegie Mellon University, Pittsburgh, PA 15213, USA Received 10 March 1997

Abstract
The strategies of rent appropriation and industry structure are inter-dependent. How firms use patents depends upon industry structure, and in turn, affects industry structure. In the 19th century, market leaders in the chemical industry combined patents and secrecy to deter entry. Within cartels, patents were used to stabilize cartels and organize technology licensing. The role of patents changed in the less concentrated post World War II markets. In bulk …ver más…

Patents are only one means of protecting technological investments, and often not the most important means of doing so. The results of the well-known Yale survey (Levin et al. (1987)) suggested that for most 'high tech' industries (except chemicals) patents are less effective than alternatives such as lead time, secrecy, and complimentary sales

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A. Arora /Research Policy 26 (1997) 391-403

and service effort. 1 Moreover, firms use patents in more subtle and sophisticated ways than simply as a legal barrier to deter rivals. An investigation of the role of patents and the alternative mechanisms for appropriating the rents from innovation can illuminate the larger question of the relationship between appropriability regime and market structure. How do the efficacy and the role of patents change with industrial structure, and in turn, how does the changing role of patents affect industry structure? This question forms the point of departure for a somewhat selective examination of the historical role of patents in the chemical industry. This essay will focus primarily upon organic chemicals, defined broadly to include petrochemical building blocks, synthetic