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How Do Patents Affect Follow-On Innovation? Evidence from the Human Genome

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  • Bhaven Sampat
  • Heidi L. Williams

Abstract

We investigate whether patents on human genes have affected follow-on scientific research and product development. Using administrative data on successful and unsuccessful patent applications submitted to the US Patent and Trademark Office, we link the exact gene sequences claimed in each application with data measuring follow-on scientific research and commercial investments. Using this data, we document novel evidence of selection into patenting: patented genes appear more valuable—prior to being patented—than non-patented genes. This evidence of selection motivates two quasi-experimental approaches, both of which suggest that on average gene patents have had no quantitatively important effect on follow-on innovation.

Suggested Citation

  • Bhaven Sampat & Heidi L. Williams, 2019. "How Do Patents Affect Follow-On Innovation? Evidence from the Human Genome," American Economic Review, American Economic Association, vol. 109(1), pages 203-236, January.
    • Handle: RePEc:aea:aecrev:v:109:y:2019:i:1:p:203-36
    Note: DOI: 10.1257/aer.20151398
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    More about this item

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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