IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/15061.html
   My bibliography  Save this paper

Do Patent Pools Encourage Innovation? Evidence from the 19th-Century Sewing Machine Industry

Author

Listed:
  • Ryan L. Lampe
  • Petra Moser

Abstract

Members of a patent pool agree to use a set of patents as if they were jointly owned by all members and license them as a package to other firms. Regulators favor pools as a means to encourage innovation: Pools are expected to reduce litigation risks for their members and lower license fees and transactions costs for other firms. This paper uses the example of the first patent pool in U.S. history, the Sewing Machine Combination (1856-1877) to perform the first empirical test of the effects of a patent pool on innovation. Contrary to theoretical predictions, the sewing machine pool appears to have discouraged patenting and innovation, in particular for the members of the pool. Data on stitches per minute, as an objectively quantifiable measure of innovation, confirm these findings. Innovation for both members and outside firms slowed as soon as the pool had been established and resumed only after it had dissolved.

Suggested Citation

  • Ryan L. Lampe & Petra Moser, 2009. "Do Patent Pools Encourage Innovation? Evidence from the 19th-Century Sewing Machine Industry," NBER Working Papers 15061, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:15061
    Note: DAE LE PR
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w15061.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sokoloff, Kenneth L., 1988. "Inventive Activity in Early Industrial America: Evidence From Patent Records, 1790–1846," The Journal of Economic History, Cambridge University Press, vol. 48(4), pages 813-850, December.
    2. Carl Shapiro, 2001. "Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard Setting," NBER Chapters, in: Innovation Policy and the Economy, Volume 1, pages 119-150, National Bureau of Economic Research, Inc.
    3. Dequiedt, V. & Versaevel, B., 2004. "Patent pools and the dynamic incentives to R&D," Working Papers 200412, Grenoble Applied Economics Laboratory (GAEL).
    4. Popp David & Juhl Ted & Johnson Daniel K.N., 2004. "Time In Purgatory: Examining the Grant Lag for U.S. Patent Applications," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-45, November.
    5. Dequiedt, Vianney & Versaevel, Bruno, 2013. "Patent pools and dynamic R&D incentives," International Review of Law and Economics, Elsevier, vol. 36(C), pages 59-69.
    6. Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)," NBER Working Papers 7552, National Bureau of Economic Research, Inc.
    7. Hall, Bronwyn H & Ziedonis, Rosemarie Ham, 2001. "The Patent Paradox Revisited: An Empirical Study of Patenting in the U.S. Semiconductor Industry, 1979-1995," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 101-128, Spring.
    8. Lerner, Josh, 1995. "Patenting in the Shadow of Competitors," Journal of Law and Economics, University of Chicago Press, vol. 38(2), pages 463-495, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nancy Gallini, 2011. "Private agreements for coordinating patent rights: the case of patent pools," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2011(3), pages 5-30.
    2. Jeitschko Thomas D. & Zhang Nanyun, 2014. "Adverse Effects of Patent Pooling on Product Development and Commercialization," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 14(1), pages 27-57, January.
    3. Daniel Quint, 2014. "Pooling with Essential and Nonessential Patents," American Economic Journal: Microeconomics, American Economic Association, vol. 6(1), pages 23-57, February.
    4. James E. Bessen, 2010. "Communicating Technical Knowledge," Levine's Working Paper Archive 661465000000000308, David K. Levine.
    5. Mario Coccia, 2013. "Population and technological innovation: the optimal interaction across modern countries," CERIS Working Paper 201307, CNR-IRCrES Research Institute on Sustainable Economic Growth - Torino (TO) ITALY - former Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY.
    6. Jay Pil Choi & Heiko Gerlach, 2015. "Patent pools, litigation, and innovation," RAND Journal of Economics, RAND Corporation, vol. 46(3), pages 499-523, September.
    7. Petra Moser, 2012. "Patent Laws and Innovation: Evidence from Economic History," NBER Working Papers 18631, National Bureau of Economic Research, Inc.
    8. Ryan L. Lampe & Petra Moser, 2011. "Patent Pools and the Direction of Innovation - Evidence from the 19th-century Sewing Machine Industry," NBER Working Papers 17573, National Bureau of Economic Research, Inc.
    9. Petra Moser & Paul W. Rhode, 2011. "Did Plant Patents Create the American Rose?," NBER Chapters, in: The Rate and Direction of Inventive Activity Revisited, pages 413-438, National Bureau of Economic Research, Inc.
    10. Ryan L. Lampe & Petra Moser, 2012. "Do Patent Pools Encourage Innovation? Evidence from 20 U.S. Industries under the New Deal," NBER Working Papers 18316, National Bureau of Economic Research, Inc.
    11. Ralph Siebert, 2013. "Are Ex Ante and Ex Post Licensing Agreements Useful Instruments to Lessen Uncertainty in R&D?," CESifo Working Paper Series 4535, CESifo.
    12. Avenyo, Elvis Korku & Francois, John Nana & Zinyemba, Tatenda P., 2021. "On gender and spatial gaps in Africa’s informal sector: Evidence from urban Ghana," Economics Letters, Elsevier, vol. 199(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ryan Lampe & Petra Moser, 2012. "Do Patent Pools Encourage Innovation? Evidence from 20 Industries in the 1930s," NBER Chapters, in: Standards, Patents and Innovations, National Bureau of Economic Research, Inc.
    2. Petra Moser, 2012. "Patent Laws and Innovation: Evidence from Economic History," NBER Working Papers 18631, National Bureau of Economic Research, Inc.
    3. Nancy Gallini & Suzanne Scotchmer, 2002. "Intellectual Property: When Is It the Best Incentive System?," NBER Chapters, in: Innovation Policy and the Economy, Volume 2, pages 51-78, National Bureau of Economic Research, Inc.
    4. Nancy Gallini, 2011. "Private agreements for coordinating patent rights: the case of patent pools," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2011(3), pages 5-30.
    5. Robin Cowan & Nicolas Jonard & Ruth Samson, 2024. "Strategies of search and patenting under different IPR regimes," Working Papers of BETA 2024-20, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    6. Dietmar Harhoff & Georg von Graevenitz & Stefan Wagner, 2016. "Conflict Resolution, Public Goods, and Patent Thickets," Management Science, INFORMS, vol. 62(3), pages 704-721, March.
    7. Yun Hou & I.P.L. Png & Xi Xiong, 2023. "When stronger patent law reduces patenting: Empirical evidence," Strategic Management Journal, Wiley Blackwell, vol. 44(4), pages 977-1012, April.
    8. Rockett, Katharine, 2010. "Property Rights and Invention," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 315-380, Elsevier.
    9. Ryan L. Lampe & Petra Moser, 2012. "Do Patent Pools Encourage Innovation? Evidence from 20 U.S. Industries under the New Deal," NBER Working Papers 18316, National Bureau of Economic Research, Inc.
    10. Stefano Comino & Fabio M. Manenti, 2022. "Patent portfolios and firms’ technological choices," Journal of Economics, Springer, vol. 137(2), pages 97-120, October.
    11. Dean Baker, 2016. "Working Paper: Rents and Inefficiency in the Patent and Copyright System: Is There a Better Route?," CEPR Reports and Issue Briefs 2016-12, Center for Economic and Policy Research (CEPR).
    12. Chondrakis, George, 2016. "Unique synergies in technology acquisitions," Research Policy, Elsevier, vol. 45(9), pages 1873-1889.
    13. Gallini, Nancy, 2014. "Cooperating with competitors: Patent pooling and choice of a new standard," International Journal of Industrial Organization, Elsevier, vol. 36(C), pages 4-21.
    14. Andrew Eckert & Corinne Langinier, 2014. "A Survey Of The Economics Of Patent Systems And Procedures," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 996-1015, December.
    15. Arora, Ashish & Ceccagnoli, Marco & Cohen, Wesley M., 2008. "R&D and the patent premium," International Journal of Industrial Organization, Elsevier, vol. 26(5), pages 1153-1179, September.
    16. Mark A. Lemley & Carl Shapiro, 2005. "Probabilistic Patents," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 75-98, Spring.
    17. Lee, Jong-Seon & Kim, Nami & Bae, Zong-Tae, 2019. "The effects of patent litigation involving NPEs on firms’ patent strategies," Technological Forecasting and Social Change, Elsevier, vol. 149(C).
    18. Zhang, Gupeng & Xiong, Libin & Duan, Hongbo & Huang, Dujuan, 2020. "Obtaining certainty vs. creating uncertainty: Does firms’ patent filing strategy work as expected?," Technological Forecasting and Social Change, Elsevier, vol. 160(C).
    19. Ryan Lampe & Petra Moser, 2013. "Patent pools and innovation in substitute technologies—evidence from the 19th-century sewing machine industry," RAND Journal of Economics, RAND Corporation, vol. 44(4), pages 757-778, December.
    20. Klein, Michael A., 2020. "Secrecy, the patent puzzle and endogenous growth," European Economic Review, Elsevier, vol. 126(C).

    More about this item

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • K0 - Law and Economics - - General
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • N11 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: Pre-1913
    • N4 - Economic History - - Government, War, Law, International Relations, and Regulation
    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:15061. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.