Alan Marco, Gordon Rausser, UC Berkeley

The last several years has seen a rapid consolidation among agricultural biotechnology firms in the United States. It has been argued that uncertainty in intellectual property is one of the influences contributing to this restructuring. It may be that uncertainty in patent rights causes spillovers and contracting problems which subsequently give firms the incentive to litigate and/or consolidate. In this paper we build on previous work by the authors to apply a model for measuring uncertainty in patent rights and its contribution to the consolidation behavior by agricultural biotechnology firms. Preliminary empirical work shows that patents on plant germplasms are subject to greater uncertainty than human biotechnology patents. The paper points out important policy implications for both the patenting and competition authority.