The Paper Trail of Knowledge Spillovers: Evidence from Patent Interferences [REVISED]

REVISED 9/2019: We show evidence of localized knowledge spillovers using a new database of multiple invention from U.S. patent interferences terminated between 1998 and 2014. Patent interferences resulted when two or more independent parties simultaneously submitted identical claims of invention to the U.S. Patent Office. Following the idea that inventors of identical inventions share common knowledge inputs, interferences provide a new method for measuring spillovers of tacit knowledge compared with existing (and noisy) measures such as citation links. Using matched pairs of inventors to control for other factors contributing to the geography of invention and distance-based methods, we find that interfering inventor pairs are 1.4 to 4 times more likely to live in the same city or region. These results are not driven exclusively by observed social ties among interfering inventor pairs. Interfering inventors are also more geographically concentrated than inventors who cite the same prior patent. Our results emphasize geographic distance as a barrier to tacit knowledge flows.