Patent Thickets, Licensing and Innovative Performance
39 Pages Posted: 19 Jan 2009 Last revised: 8 Oct 2013
Date Written: 2008
We examine the relationship between fragmented intellectual property (IP) rights and innovative performance, taking into consideration the role played by in-licensing of IP. Controlling for a variety of firm and market characteristics, we find that firms facing more fragmented IP landscapes are more likely to report expenditures on in-licensing and for those firms that do incur license costs we find a weak positive association between licensing expenditure and fragmented IP rights in the relevant technology. We also observe a negative relationship between IP fragmentation and innovative performance, but only for firms that engage in in-licensing and only for product innovation. The relationship between fragmentation and innovative performance also depends on the size of a firm's patent portfolio, which suggests an important strategic role for defensive patenting in the context of fragmented property rights.
Keywords: patent thickets, licensing, innovative performance
JEL Classification: O34, O31
Suggested Citation: Suggested Citation