Shooting Ourselves in the Foot to Kill a Fly? Patent Enforcement and Market for Technology

38 Pages Posted: 24 Jul 2017 Last revised: 24 Dec 2017

See all articles by Senem Aydin

Senem Aydin

Northeastern University - D’Amore-McKim School of Business

Pooyan Khashabi

Ludwig Maximilian University of Munich - Institute for Strategy, Technology and Organization (ISTO)

Date Written: July 20, 2017

Abstract

Patent enforcement and its wide consequences have long been debated among scholars and practitioners. This study examines the causal impact of patent enforcement strength on firms’ technology trade and patenting strategies. Exploiting a precedential U.S. Supreme Court decision (eBay vs. MercExchange, 2006) that reduced patent enforcement strength, we investigate its impact by comparing U.S. firms to a matched control group of European firms. We find that U.S. firms significantly decrease their patenting and out-licensing activities due to lower patent enforcement strength. The decline in out-licensing activities is specifically driven by small and medium-sized firms, and software companies. Our study contributes to the innovation and markets for technology literatures by depicting the causal impact of patent enforcement strength, and discussing its implications.

Keywords: patent enforcement, market for technology, patenting, licensing, technology trade

Suggested Citation

Aydin, Senem and Khashabi, Pooyan, Shooting Ourselves in the Foot to Kill a Fly? Patent Enforcement and Market for Technology (July 20, 2017). Available at SSRN: https://ssrn.com/abstract=3006103 or http://dx.doi.org/10.2139/ssrn.3006103

Senem Aydin (Contact Author)

Northeastern University - D’Amore-McKim School of Business ( email )

360 Huntington Ave.
Boston, MA 02115
United States

Pooyan Khashabi

Ludwig Maximilian University of Munich - Institute for Strategy, Technology and Organization (ISTO) ( email )

Kaulbachstr, 45
Munich, 80539
Germany
+49 89 2180 5415 (Phone)

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