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What is the Impact of Software Patent Shifts?: Evidence from Lotus v. Borland

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  • Josh Lerner
  • Feng Zhu

Abstract

Economists have debated the extent to which strengthening patent protection spurs or detracts from technological innovation. In this paper, we examine the reduction of software copyright protection in the Lotus v. Borland decision. If patent and copyright protections are substitutes, then weakening of one form of protection should be associated with an increasing reliance on the other. We find that the firms affected by the diminution of copyright protection disproportionately accelerated their patenting in subsequent years. But little evidence can be found for harmful effects: in fact, the increased reliance on patents is correlated with some positive outcomes for firms.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11168.

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Date of creation: Mar 2005
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Publication status: published as Lerner, Josh and Feng Zhu. "What is the impact of software patent shifts? Evidence from Lotus v. Borland." International Journal of Industrial Organization 25, 3 (June 2007): 511-529.
Handle: RePEc:nbr:nberwo:11168

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  1. Samuel Kortum & Josh Lerner, 1997. "Stronger Protection or Technological Revolution: What is Behind the Recent Surge in Patenting?," NBER Working Papers 6204, National Bureau of Economic Research, Inc.
  2. Carl Shapiro, 2003. "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting," Law and Economics 0303005, EconWPA.
  3. Jean O. Lanjouw, 1998. "The Introduction of Pharmaceutical Product Patents in India: "Heartless Exploitation of the Poor and Suffering"?," NBER Working Papers 6366, National Bureau of Economic Research, Inc.
  4. James Bessen & Robert M. Hunt, 2004. "An empirical look at software patents," Working Papers 03-17, Federal Reserve Bank of Philadelphia.
  5. Oliver Hart & John Moore, 1988. "Property Rights and the Nature of the Firm," Working papers 495, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Rosemarie Ham Ziedonis, 2004. "Don't Fence Me In: Fragmented Markets for Technology and the Patent Acquisition Strategies of Firms," Management Science, INFORMS, vol. 50(6), pages 804-820, June.
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Cited by:
  1. Iain M. Cockburn & Megan J. MacGarvie, 2006. "Entry and Patenting in the Software Industry," NBER Working Papers 12563, National Bureau of Economic Research, Inc.
  2. Wagner, S. & Cockburn, I., 2010. "Patents and the survival of Internet-related IPOs," Research Policy, Elsevier, vol. 39(2), pages 214-228, March.
  3. Peng Huang & Marco Ceccagnoli & Chris Forman & D.J. Wu, 2009. "Participation in a Platform Ecosystem: Appropriability, Competition, and Access to the Installed Base," Working Papers 09-14, NET Institute, revised Sep 2009.
  4. Michael Noel & Mark Schankerman, 2006. "Strategic patenting and software innovation," LSE Research Online Documents on Economics 4653, London School of Economics and Political Science, LSE Library.
  5. Feng Zhu, 2008. "Ad-sponsored Business Models and Compatibility Incentives of Social Networks," Working Papers 08-20, NET Institute, revised Sep 2008.
  6. Michael Noel & Mark Schankerman, 2006. "Strategic patenting and software innovation," LSE Research Online Documents on Economics 3727, London School of Economics and Political Science, LSE Library.

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