Patent Licensing, Non-Practising Entities, and Investment in R&D

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Original languageEnglish
Pages (from-to)396-462
Number of pages67
Journal / PublicationJournal of Industrial Economics
Issue number2
Publication statusPublished - Jun 2022


This paper studies the impact of Non-Practising Entities (NPE's) on investment in innovation. The issue is considered in an environment with strategic investment behavior and licensing. Patent strength turns out to be central in determining the impact of an NPE on innovation. A patenting scheme which assigns rights only to incremental innovation improvement (relative to the innovations of competitors) raises aggregate investment relative to a ‘winner-takes-all’ scheme. In a ‘winner-takes-all’ scheme the most successful/encompassing innovation obtains all the intellectual property rights, and less successful innovators none, and in this environment the presence of an NPE negatively impacts aggregate investment.

Research Area(s)

  • Innovation, Intellectual Property, Investment, Non-Practising Entities