Patent Pools, Competition, and Innovation—Evidence from 20 US Industries under the New Deal

Abstract

Patent pools have become a prominent mechanism to reduce litigation risks and facilitate the commercialization of new technologies. This article takes advantage of a window of regulatory tolerance under the New Deal to investigate the effects of pools that would form in the absence of effective antitrust. Differencein-differences regressions of patents and patent citations across 20 industries imply a 14% decline in patenting for each additional patent that is included in a pool. An analysis of the mechanism by which pools discourage innovation indicates that this decline is driven by technologies for which the creation of a pool weakened competition in R&D. (JEL K21, L24, L41, O31)

Can voluntary environmental regulation promote corporate technological innovation?

“…In addition to these company‐level factors, the external environment of firms also plays a certain role in technological innovation. Therefore, referring to the related literature (Lampe & Moser, ), we used the degree of industry competition, which was measured by the standard deviation of the main business profit margin of the industry, to control for the distinctions in the operating environments among industries. Moreover, according to Ahuja and Katila (), regional economic level (REL) might also affect the overall innovation performance of local firms; thus, we used the logarithm of per capita gross domestic product of the province in which a firm was located to control for this factor.…”

Patent pools, litigation, and innovation

“…3 In particular, Lampe and Moser (2010, forthcoming) show that the pool has discouraged patenting and innovation and attribute the negative incentive e¤ects of patent pools to the fact that patent pools create more formidable entities in court and thus increases the threat of litigation for outside …rms. Lampe and Moser (2013) further extend their empirical analysis to examine patent pools in 20 industries in the 1930s. They …nd a substantial decline in patenting after the formation of a pool and come to the same conclusions as for the sewing machine industry.…”

Patent Citations and the Size of the Inventive Step - Evidence from Hybrid Corn

“…Also seeKuznets (1962, p. 37): "the main difficulty with patent statistics is, of course, the enormous range in the magnitude of the inventions covered." 3 E.g.,Kortum and Lerner 2000;Sørensen and Stuart 2000;Qian 2007;Kerr 2010;Belanzon 2012 Lampe and Moser (2012). extend existing data sets of patent citations backwards to begin in the 1921 (using the full text of patent documents in the Google/USPTO historical data set).…”

“…The subclass that includes the largest number of claims is the primary subclass; subclasses that include other claims serve as crossreference subclasses. SeeLampe and Moser (2012) for an application and discussion of cross-reference subclasses.…”