Working Paper: NBER ID: w15598
Authors: Petra Moser; Alessandra Voena
Abstract: Compulsory licensing allows firms in developing countries to produce foreign-owned inventions without the consent of foreign patent owners. This paper uses an exogenous event of compulsory licensing after World War I under the Trading with the Enemy Act to examine the long run effects of compulsory licensing on domestic invention. Difference-in-differences analyses of nearly 200,000 chemical inventions suggest that compulsory licensing increased domestic invention by at least 20 percent.
Keywords: compulsory licensing; domestic invention; Trading with the Enemy Act; patents
JEL Codes: N32; N42; O1; O12; O2; O3; O31; O34; O38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Compulsory licensing under the TWEA (D45) | Domestic invention in the U.S. (N62) |
| Each additional license granted (D45) | Domestic patents (O34) |
| Novelty of licensed patents (O34) | Domestic invention (O39) |
| Compulsory licensing under the TWEA (D45) | Increase in patent applications over time (O38) |