Working Paper: NBER ID: w18316
Authors: Ryan L. Lampe; Petra Moser
Abstract: Patent pools, which allow competing firms to combine their patents, have emerged as a prominent mechanism to resolve litigation when multiple firms own patents for the same technology. This paper takes advantage of a window of regulatory tolerance under the New Deal to investigate the effects of pools on innovation within 20 industries. Difference-in-differences regressions imply a 16 percent decline in patenting in response to the creation of a pool. This decline is driven by technology fields in which a pool combined patents for substitute technologies by competing firms, suggesting that unregulated pools may discourage innovation by weakening competition to improve substitutes.
Keywords: patent pools; innovation; antitrust; New Deal; U.S. industries
JEL Codes: K0; L4; N22; O3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Creation of a patent pool (O36) | Decline in patent applications (O38) |
| Decline in patent applications (O38) | Discouragement of innovation (O31) |
| Creation of a patent pool (O36) | Weakening of competition (L12) |
| Creation of a patent pool (O36) | Delay in transition to color film technology (C41) |
| Creation of a patent pool (O36) | Reduction in litigation risks (K41) |
| Creation of a patent pool (O36) | Decrease in incentive for firms to invest in R&D (O39) |