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

44 Pages Posted: 18 Aug 2012 Last revised: 27 Oct 2014

Ryan Lampe

California State University, East Bay - Department of Economics

Petra Moser

Leonard N. Stern School of Business - Department of Economics; National Bureau of Economic Research (NBER)

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Date Written: August 2012

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

Lampe, Ryan and Moser, Petra, Do Patent Pools Encourage Innovation? Evidence from 20 U.S. Industries Under the New Deal (August 2012). NBER Working Paper No. w18316. Available at SSRN: https://ssrn.com/abstract=2131686

Ryan Lampe (Contact Author)

California State University, East Bay - Department of Economics ( email )

25800 Carlos Bee Blvd.
Hayward, CA 94542
United States

Petra Moser

Leonard N. Stern School of Business - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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