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Patent policy and American innovation after eBay: An empirical examination

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  • Mezzanotti, Filippo
  • Simcoe, Timothy

Abstract

The 2006 Supreme Court ruling in eBay vs. MercExchange removed the presumption of injunctive relief from infringement and marked a sea change in U.S. patent policy. Subsequent legal and policy changes reduced the costs of challenging patent validity and narrowed the scope of patentable subject matter. Proponents of these changes argue that they have made the U.S. patent system more equitable, particularly for sectors such as information technology, where patent ownership is fragmented and innovation highly cumulative. Opponents suggest the same reforms have weakened intellectual property rights and curtailed innovation. After reviewing the legal background and relevant economic theory, we examine patenting, R&D spending, venture capital investment and productivity growth in the wake of the eBay decision. Overall, we find no evidence that changes in patent policy have harmed the American innovation system.

Suggested Citation

  • Mezzanotti, Filippo & Simcoe, Timothy, 2019. "Patent policy and American innovation after eBay: An empirical examination," Research Policy, Elsevier, vol. 48(5), pages 1271-1281.
    • Handle: RePEc:eee:respol:v:48:y:2019:i:5:p:1271-1281
    DOI: 10.1016/j.respol.2019.01.004
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    Cited by:

    1. Filippo Mezzanotti & Timothy Simcoe, 2022. "Innovation and Appropriability: Revisiting the Role of Intellectual Property," Working Papers 22-09, Center for Economic Studies, U.S. Census Bureau.
    2. Arora, Ashish & Belenzon, Sharon & Sheer, Lia, 2021. "Matching patents to compustat firms, 1980–2015: Dynamic reassignment, name changes, and ownership structures," Research Policy, Elsevier, vol. 50(5).
    3. Filippo Mezzanotti, 2021. "Roadblock to Innovation: The Role of Patent Litigation in Corporate R&D," Management Science, INFORMS, vol. 67(12), pages 7362-7390, December.
    4. Brander, James A. & Spencer, Barbara J., 2021. "Patent assertion entities and the courts: Injunctive or fee-based relief?," International Review of Law and Economics, Elsevier, vol. 65(C).
    5. Jiafeng Gu, 2021. "Effects of Patent Policy on Outputs and Commercialization of Academic Patents in China: A Spatial Difference-in-Differences Analysis," Sustainability, MDPI, vol. 13(23), pages 1-17, December.
    6. Dan Prud’homme & Tony W. Tong & Nianchen Han, 2021. "A stakeholder-based view of the evolution of intellectual property institutions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(4), pages 773-802, June.
    7. Rasmus Arler Bogetoft & Peter Bogetoft, 2022. "Market entrance, patents, and preliminary injunctions: a model of pharmaceutical patent litigation," European Journal of Law and Economics, Springer, vol. 53(3), pages 379-423, June.
    8. Filippo Mezzanotti & Timothy Simcoe, 2023. "Research and/or Development? Financial Frictions and Innovation Investment," Working Papers 23-39, Center for Economic Studies, U.S. Census Bureau.

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    More about this item

    Keywords

    Injunction; Patents; Innovation; eBay decision;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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