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Antitrust, Patents, and Cumulative Innovation: Evidence from Bell Labs

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  • Nagler, Markus
  • Watzinger, Martin
  • Fackler, Thomas
  • Schnitzer, Monika

Abstract

How large is the impact of intellectual property on cumulative innovation in electronics, computers and communications? Following an antitrust lawsuit against Western Electric and AT&T, Bell Labs had to license all patents published by 1956 for free. We find that this removal of patent rights increased subsequent citations to Bell's patents by 7%. Patenting in affected patent subclasses increased by 17%. The effect comes from young and small firms in fields in which Bell did not remain commercially active. Placebo regressions support the identification assumption of parallel trends in citations.

Suggested Citation

  • Nagler, Markus & Watzinger, Martin & Fackler, Thomas & Schnitzer, Monika, 2016. "Antitrust, Patents, and Cumulative Innovation: Evidence from Bell Labs," VfS Annual Conference 2016 (Augsburg): Demographic Change 145580, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc16:145580
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation

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