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Do Patent Pools Encourage Innovation? Evidence from 20 U.S. Industries under the New Deal

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  • Ryan L. Lampe
  • Petra Moser

Abstract

Patent pools, which allow competing firms to combine their patents, have emerged as a prominent mechanism to resolve litigation when multiple firms own patents for the same technology. This paper takes advantage of a window of regulatory tolerance under the New Deal to investigate the effects of pools on innovation within 20 industries. Difference-in-differences regressions imply a 16 percent decline in patenting in response to the creation of a pool. This decline is driven by technology fields in which a pool combined patents for substitute technologies by competing firms, suggesting that unregulated pools may discourage innovation by weakening competition to improve substitutes.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18316.

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Date of creation: Aug 2012
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Handle: RePEc:nbr:nberwo:18316

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Cited by:
  1. Thomas D. Jeitschko & Nanyun Zhang, 2012. "Adverse Effects of Patent Pooling on Product Development and Commercialization," EAG Discussions Papers 201205, Department of Justice, Antitrust Division.
  2. Leonid Kogan & Dimitris Papanikolaou & Amit Seru & Noah Stoffman, 2012. "Technological Innovation, Resource Allocation, and Growth," NBER Working Papers 17769, National Bureau of Economic Research, Inc.
  3. Rob Aalbers & Victoria Shestalova & Viktoria Kocsis, 2012. "Innovation policy for directing technical change in the power sector," CPB Discussion Paper 223, CPB Netherlands Bureau for Economic Policy Analysis.
  4. Ralph Siebert, 2013. "Are Ex Ante and Ex Post Licensing Agreements Useful Instruments to Lessen Uncertainty in R&D?," CESifo Working Paper Series 4535, CESifo Group Munich.
  5. Dequiedt, Vianney & Versaevel, Bruno, 2013. "Patent pools and dynamic R&D incentives," International Review of Law and Economics, Elsevier, vol. 36(C), pages 59-69.

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