1. Explain the basic difference between patent law and copyright law as it concerns blocking rights.2. Explain why blocking rights are important in setting the incentives for successive innovators. In answering this, distinguish between (a) two stages of innovation (basic and applied research), and (b) a quality ladder where each innovator is replaced in the market.3. Name four innovation challenges faced by the BP/Berkeley/LBL/UIUC Energy Biosciences Initiative.4. Name one potential holdup of patented technology that the EBI might face.5. Explain how the Biobricks initiative in synthetic biology relates to the work of Adam Smith.6. Describe three distinct types of cumulative innovation. Give examples (in asentence or so) of each.7. Identify two classes of research tools with distinctly different possibilities ofreverse engineering.8. Give two historical examples of innovations that built on others’ work.9. Assume firm x has a research tool that firm y could use to make a new product innovation that infringes the prior innovation. Under what cost conditions will ex ante licensing yield more to firm x than ex post licensing?10.Explain with a diagram why it may be efficient to have a narrow patent witha long life than a broader patent with a shorter life, which offers the same present value of incentive. Can you relate your answer to the “ratio test?” 11.What is the key economic question with respect to sequential innovation? Why?12.In a quality ladder, expected effective patent life can be short. Explain.13.How can breadth of protection be used to increase innovative incentives on the quality ladder?14.Distinguish “inventive step” from “patent breadth.” Which is a better meansof increasing efficiency on a quality ladder? Explain.15.On a competitive quality ladder, the minimum inventive step for a patent isD which also is the leading breadth within which a patent on a new technology infringes the prior patent. If a new idea arrives which implies a step of D, what is the price of the new technology? Explain.16.In the previous example, if a new idea arrives which implies a step of D/2, what is the price of the new technology? Explain. Is there a policy change that could improve efficiency in this case?17. List 2 main challenges associated with cumulative innovation. List 3 policy levers that might help meet those challenges.18.List three reasons to license innovations.19.A monopolist faces demand and total costs: 2Demand: -Total cost: A bQF kQ cQ+ + What is her profit-maximizing output and price?20.If she has two separate factories each with identical costs as above, what is her output and price? Interpret your answers to this and the previous question.21.If the patentee has no factories but can license to two factory-owners, each with a factory with total cost as above, and each assuming the other will not react to its output, what is the profit-maximizing price for output,from the patentee’s viewpoint? Is there a license scheme that will give the patentee the same profits as if she owned the two factories? Is there a royalty equal to price minus marginal cost?22. What percentage of US patents is licensed at present? Is it usual for a firm to enter when it is relying on licensing to generate its main revenue?23.What is the Energy Biosciences Initiative? What parties are involved? Mention one intellectual property management challenge it might face. 24.There are two innovations that are complements (they have to be used together by the application innovators)Their demands are: 1 1 22 2 11/ 21/ 2z p pz p p= - -= - - Assume each has zero marginal cost and sets its price assuming the other will not react. Derive equilibrium prices, outputs and profits of the two firms25.In the previous question, assume the two firms collaborate as a single monopolist. Derive equilibrium price, output and profits. Compare to the answer in the previous question.26.Relate the synthetic biology “Biobricks” initiative to a theoretical insight of Adam Smith. 27.Do the 1995 licensing guidelines of the Department of Justice hold that thefollowing practices are per se illegal? a. Tie-ins requiring purchase of unpatented materialsb. Veto power over licenses from the licensee to othersc. Minimum-price provisions on sale of patented goods.28.Is the case for patent pools stronger if a. The pool contains technologies that are substitutes for each other?b. The pool contains technologies that are complements to each other?Explain.29.Give an example of a government-approved patent pool froma. The early 20th centuryb. The past few decades. Explain in a few sentences if you can. 30.An inventor has an innovation that lowers the cost of production of a competitive industry. Draw two diagrams showing the effect on market price of the industry if:a. The innovation does not affect market price. b. The innovation lowers market price.If the patentee monopolized the production of the industry, would he have more or less incentive to innovate? Explain.31.Why are treble damages important for enforcement of IPRs? Does the answer relate to probabilities?32.What are two recent Supreme Court decisions affecting obviousness and injunctions, and what (in brief) was the direction of change in interpretationof patent law (relative to current practice) in each