Optimal patent breadth and length with costly imitation

Patent breadth is defined using the number of potential entrants which enter an industry. It is shown that optimal patent design may be broad and short-lived or narrow and infinitely-lived depending on the market structure assumed and the properties of the demand function. In the presence of costly imitation and endogenous entry it is shown that optimal patent design may be either broad, narrow, or of intermediate breadth depending on the properties of the aggregate imitation cost function. (C) 1999 Elsevier Science B.V. All rights reserved.