Abstract

http://ssrn.com/abstract=1468062
 
 

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Patent Pools and Innovation in Substitutes - Evidence from the 19th Century Sewing Machine Industry


Ryan Lampe


California State University, East Bay - Department of Economics

Petra Moser


Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

February 28, 2013


Abstract:     
Patent pools, which combine complementary patents of competing firms, are expected to increase overall welfare – but potentially discourage innovation in substitutes for the pool technology. This paper exploits a new historical data set on changes in patenting and firm entry for a clearly defined pool technology and substitutes in the 19th century sewing machine industry to investigate the effects of a pool on innovation in substitutes. This analysis reveals a substantial increase in innovation for an – albeit technologically inferior – substitute technology. Historical evidence suggests that the creation of a pool diverted innovation towards an inferior substitute by creating differential license fees and litigation risks, which made it more difficult for outside firms to compete directly with the pool technology.

Number of Pages in PDF File: 48

Keywords: Patent Pools, Innovation, Patents, Intellectual Property, Economic History

JEL Classification: K00, N00, N41, 031

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Date posted: September 6, 2009 ; Last revised: February 28, 2013

Suggested Citation

Lampe, Ryan and Moser, Petra, Patent Pools and Innovation in Substitutes - Evidence from the 19th Century Sewing Machine Industry (February 28, 2013). Available at SSRN: http://ssrn.com/abstract=1468062 or http://dx.doi.org/10.2139/ssrn.1468062

Contact Information

Ryan Lampe (Contact Author)
California State University, East Bay - Department of Economics ( email )
25800 Carlos Bee Blvd.
Hayward, CA 94542
United States
Petra Moser
Stanford University - Department of Economics ( email )
Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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