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Does fragmented or heterogeneous IP ownership stifle investments in innovation?

  • Schwiebacher, Franz
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    Thickets of partially overlapping patent rights raise costs to secure IPR for innovation. Fragmented IP ownership raises coordination costs to resolve mutual blockades. Inadvertent patent infringement poses the risk of fruits from investments to be exploited. A gap in economic commitment levels may be exploited if capital-intensive innovators have more invested application-specifically than inadvertently infringed IPR owners. I study whether fragmentation or heterogeneous capital-intensities among owners of overlapping patents affect propensities to invest in innovation. I find that firms with small patent portfolios are less likely to invest in innovation if IPR is fragmented. Firms with large patent portfolios are less likely to invest in innovation if cited patent owners have smaller stocks of fixed capital. This suggests that effects of patent thickets on innovation are not evenly spread among innovating firms.

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    Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 13-096.

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    Date of creation: 2013
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    Handle: RePEc:zbw:zewdip:13096
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