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Articles in Industry and Innovation 27/1-2:
Editorial: why and when do firms trademark? Bridging perspectives from 
industrial organisation, innovation and 
By: Guest editors, Carolina Castaldi, Joern Block & Meindert J. Flikkema
Original Articles
On the price elasticity of demand for 
By: Gaétan de Rassenfosse

Abstract: One underexplored factor directly affecting firms' use of trademarks 
relates to the fees associated with obtaining a mark. This paper provides 
econometric estimates of the fee elasticity of demand for trademark 
applications. Using a panel of monthly international trademark applications, I 
find that a 10-percent increase in fees leads to a 2.5-4.0-percent decrease in 
applications. The econometric analysis also highlights that trademark filings 
react strongly to economic activity. The results bear implications for 
literature on the value of trademarks and for the use of trademarks as 
innovation indicator. Specifically, low elasticity estimates suggest that 
trademarks provide significant economic value to their owners relative to their 
costs. However, one must exercise caution when comparing trademark numbers 
across countries to the extent that fees might differ substantially.

>From a distinctive sign to an exchangeable asset: exploring the U.S. market 
>for trademark 
By: Edoardo Ferrucci, Maria Isabella Leone, Manuel Romagnoli & Andrea Toros

Abstract: A remarkable growth in the value of trademark licencing has been 
recently recorded. Our paper contributes to the understanding of this 
under-explored phenomenon using a dataset newly released by the USPTO. Our 
study analyses the evolution of licencing activities in the U.S. during the 
2003-2017 period, the characteristics of these trademarks and agreements, and 
certain features of the licencing parties involved. We found that licencing 
activities varied considerably during these years. They were usually signed 
between two parties only, and, on average, they involved more than one 
trademark. Excluding under-reporting effect, the analyses reveal that a large 
portion of heterogeneity in licencing activity is due to the NICE international 
classes associated with each trademark. Indeed, trademark licencing agreements 
appear to be unevenly distributed across these classes, suggesting that this 
activity and the way it is carried out is correlated with the market to which 
the licenced trademark refers.

Are two better than one? Modelling the complementarity between patents and 
trademarks across 
By: Patrick Llerena & Valentine Millot

Abstract: Intellectual property (IP) rights are a major component of firms' 
strategies to appropriate the benefits of their innovations. This paper aims at 
assessing the interactions between two types of IP rights, namely patents and 
trademarks. We first model the effect of these two types of IP rights on the 
returns of innovations for firms. Based on a supermodularity analysis, we then 
show that the complementarity between trademarks and patents varies according 
to the characteristics of the market. Depending on the levels of advertising's 
spillovers and depreciation rate, trademarks are found to be complementary or 
not to patents. Finally, based on a data set encompassing the IP activity of a 
sample of publicly traded firms among the top corporate R&D investors 
worldwide, we find that patents and trademarks are complementary in chemical 
and pharmaceutical sectors, but not in Information and Communication 
Technologies (ICT) sectors.

The valuation of patent-trademark pairing as IP strategy: evidence from the 
By: Grid Thoma

Abstract: The benefits of an IP strategy for an innovative project that 
combines both patenting and trademarking are compared to those of patenting 
alone. The results of the proposed econometric analysis of patents indicate 
that a strategy that pairs patenting and trademarking almost doubles patent 
value. The validity of this result was confirmed by examining several patentee 
demographic characteristics and an extensive set of patent value indicators 
regarding breadth and technology potential, prior art and patent background, 
filing and procedural aspects of a patent and IP usage mode. Quite interesting, 
when the holder of a utility patent also obtains a design patent, rather than 
opting for a trademark, there is no enhancement of the premium value.

Overlap in external technology search locations and the breadth of IPR assets: 
lessons from the Security Software 
By: Szabolcs Szilárd Sebrek

Abstract: This study examines the effect of intellectual property rights (IPR) 
on firms' geographic overlap strategy of external technology search (ETS) 
compared to rivals. I reveal that firms are able to realise less intensity of 
geographic overlap in ETS locations compared to competitors and that this 
outcome is a function of the breadth of their upstream (generality of patents) 
and downstream (diversification of trademarks) IPR tools. Accordingly, I 
conclude that both covariates influence the spatial isolation of ETS vis-à-vis 
competitors. The effect of generality of patents on isolation, however, is more 
pronounced in comparison with diversification of trademarks at strategic 
technology alliances, meanwhile the reverse scenario is true at acquisitions. I 
also reveal relevant findings about resource-rich organisations defined as 
those with the broadest portfolio of such up- and downstream IPR assets within 
the industry.

Why do innovators not apply for trademarks? The role of information asymmetries 
and collaborative 
By: Suma Athreye & Claudio Fassio

Abstract: This paper analyses the underlying reasons why innovators do not 
apply for trademarks for all of their valuable inventions. Using a unique 
database of UK innovations linked to innovative firms, the empirical analysis 
highlights the many ways that firms can alleviate information asymmetries and 
the constraints imposed by collaborative innovation without taking recourse to 
trademarks. When information asymmetries are not at stake, i.e. when firms use 
an already existing trademark for their innovations or when they use 
intermediaries for its distribution, trademarks no longer serve their purpose, 
leading firms to avoid using it for their innovations. Open innovation also 
decreases the incentive to trademark, especially when the innovative process 
involves users, mainly because of property rights issues or because the 
innovator prefers to use the clients' own distribution channels.

Trademarks and their association with Kirznerian 
By: Serhiy Lyalkov, Mónica Carmona, Emilio Congregado, Ana Millán & José María 

Abstract: Although trademarks are the most widely used form of Intellectual 
Property Rights (IPRs) by firms across all economic sectors worldwide, this 
indicator is a much less exploited information resource in empirical analysis 
compared with patents. Our work addresses this gap by investigating the 
relationship between trademark registration and entrepreneurial activity using 
data for 33 European countries. Our empirical results show a positive and 
significant relationship between the share of the self-employed workforce in a 
given country that can be considered 'entrepreneurial' - which we associate 
with the share of Kirznerian entrepreneurs - and trademark registration at the 
country level. These results have important implications for scholars, 
practitioners and policymakers, which are discussed in this work.

Innovation activities and business cycles: are trademarks a leading 
By: Charles A. W. deGrazia, Amanda Myers & Andrew A. Toole

Abstract: Despite the widespread use of economic information to anticipate 
changes in business conditions, innovation metrics are not considered to be 
leading indicators. We argue that aggregate trademark data reflect firm-level 
choices that can help predict business cycles. In addition to establishing the 
conceptual basis for considering trademarks, our statistical evaluations, using 
turning point analysis and a novel machine learning method, find that trademark 
filings for product and service offerings in commercial use outperform many of 
the conventional leading indicators. Our work suggests that including trademark 
metrics in composite indexes could improve recession forecasting performance.

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