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Do Patent Pools Encourage Innovation? Evidence from 20 U.S. Industries under the New Deal

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  • 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.

Suggested Citation

  • 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.
    • Handle: RePEc:nbr:nberwo:18316
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    Cited by:

    1. 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.
    2. repec:zbw:bofrdp:2017_017 is not listed on IDEAS
    3. Gandal, Neil & Regibeau, Pierre, 2013. "SSOs: Current Policy Issues and Empirical Evidence," Foerder Institute for Economic Research Working Papers 275825, Tel-Aviv University > Foerder Institute for Economic Research.
    4. Rob Aalbers & Victoria Shestalova & Viktoria Kocsis, 2012. "Innovation policy for directing technical change in the power sector," CPB Discussion Paper 223, CPB Netherlands Bureau for Economic Policy Analysis.
    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. Dr Chiara Rosazza Bondibene, 2012. "A Study of Patent Thickets," National Institute of Economic and Social Research (NIESR) Discussion Papers 401, National Institute of Economic and Social Research.
    7. Iftekhar Hasan & Fahad Khalil & Xian Sun, 2017. "The Impacts of Intellectual Property Rights Protection on Cross-Border M&As," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 7(03), pages 1-35, September.
    8. Petra Moser & Tom Nicholas, 2013. "Prizes, Publicity and Patents: Non-Monetary Awards as a Mechanism to Encourage Innovation," Journal of Industrial Economics, Wiley Blackwell, vol. 61(3), pages 763-788, September.
    9. Leonid Kogan & Dimitris Papanikolaou & Amit Seru & Noah Stoffman, 2017. "Technological Innovation, Resource Allocation, and Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(2), pages 665-712.
    10. Petra Moser & Joerg Ohmstedt & Paul W. Rhode, 2018. "Patent Citations—An Analysis of Quality Differences and Citing Practices in Hybrid Corn," Management Science, INFORMS, vol. 64(4), pages 1926-1940, April.
    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. Wen, Jun & Zhao, Xinxin & Fu, Qiang & Chang, Chun-Ping, 2023. "The impact of financial risk on green innovation: Global evidence," Pacific-Basin Finance Journal, Elsevier, vol. 77(C).

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    More about this item

    JEL classification:

    • K0 - Law and Economics - - General
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • N22 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: 1913-
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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