Reputations for Toughness in Patent Enforcement: Implications for Knowledge Spillovers via Inventor Mobility

46 Pages Posted: 16 Jan 2008  

Rajshree Agarwal

University of Maryland - Robert H. Smith School of Business

Martin Ganco

University of Wisconsin - Madison - Department of Management and Human Resources

Rosemarie Ham Ziedonis

Boston University Questrom School of Business

Date Written: December 1, 2007

Abstract

"Job hopping" by scientists and engineers is an important channel for knowledge diffusion. Little is known, however, about the effectiveness of actions firms take to reduce the outward flow of know-how and talent from their own organizations. Building on theories of reputation-building and strategic deterrence, this study investigates the moderating effects of corporate reputations for "toughness" in the enforcement of patents. Drawing on a unique database of enforcement activity, inter-firm inventor mobility events, and patent citations in the U.S. semiconductor industry, we find that a firm's litigiousness significantly curtails the dissemination of knowledge anticipated from employee departures, particularly to firms that are relatively disadvantaged to fund or withstand a legal dispute (i.e., that are small, young, or private). The overall effects are similar in magnitude for California-based firms relative to firms headquartered in other states. The study sheds new light on the strategic levers firms use to capture value from investments in human capital and R&D.

Keywords: Reputation, Corporate Strategy, Intangible Assets, Patents, Knowledge spillovers, employee mobility

JEL Classification: O32, J60

Suggested Citation

Agarwal, Rajshree and Ganco, Martin and Ziedonis, Rosemarie Ham, Reputations for Toughness in Patent Enforcement: Implications for Knowledge Spillovers via Inventor Mobility (December 1, 2007). Available at SSRN: https://ssrn.com/abstract=1083263 or http://dx.doi.org/10.2139/ssrn.1083263

Rajshree Agarwal (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

Martin Ganco

University of Wisconsin - Madison - Department of Management and Human Resources ( email )

Madison, WI
United States

Rosemarie Ham Ziedonis

Boston University Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

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