Licensing tacit knowledge: Intellectual property rights and the market for know-how
Journal Article (Journal Article)
Technology transfer involves more than just the permission to use knowledge covered by patents; the transfer of know-how is critical to the successful utilization of the transferred technology. However, know-how is typically difficult to codify, costly to transfer, and hence, difficult to contract upon. Using a principal-agent model I show that simple arms length contracts can accomplish the transfer know-how. The key to the success of arms length contracts is the complementarity between know-how and patents. The model explains why patents and know-how are bundled together in licensing contracts. It shows why licensing has limitations as a strategy for appropriating rents from innovation. The paper points to the key role that patent scope plays in determining the efficiency of know-how transfer and shows that broader patents can improve the efficiency of technology transfer, even when important components of the technology (know-how) are not protected by patents. © 1995, Taylor & Francis Group, LLC. All rights reserved.
Full Text
Duke Authors
Cited Authors
- Arora, A
Published Date
- January 1, 1995
Published In
Volume / Issue
- 4 / 1
Start / End Page
- 41 - 60
Electronic International Standard Serial Number (EISSN)
- 1476-8364
International Standard Serial Number (ISSN)
- 1043-8599
Digital Object Identifier (DOI)
- 10.1080/10438599500000013
Citation Source
- Scopus