The Assignment of Intellectual Property Rights and Innovation

47 Pages Posted: 7 Jan 2021 Last revised: 16 Apr 2024

See all articles by Chris Armstrong

Chris Armstrong

Stanford Graduate School of Business

Stephen Glaeser

University of North Carolina (UNC) at Chapel Hill

Stella Y. Park

University of Pennsylvania - The Wharton School

Oscar Timmermans

London School of Economics

Date Written: April 14, 2024

Abstract

We study how the assignment of intellectual property rights for successful innovations between inventors and their employers affect inventor-employer matching, the generality of innovation, and innovation disclosure. To do so, we examine the effect of a major court ruling that significantly shifted the assignment of intellectual property rights from inventors to their employers. Our evidence from within-firm-year analyses show that inventors affected by the ruling are less likely to leave their current employer, more likely to create generalized innovations, and more promptly disclose their innovations, compared to unaffected inventors at the same firm. If affected inventors do leave their employer, they are relatively more likely to choose noncorporate employment. Firms affected by the ruling are more likely to locate their inventors in agglomeration economies, suggesting that strengthened property rights reduce the perceived risk of talent poaching and outgoing knowledge spillovers. We conclude that the assignment of intellectual property rights affects inventor-employer matching, the types of innovations inventors create, and the disclosure of innovation.

Keywords: corporate innovation, disclosure, relationship-specific investment, employee mobility, misappropriation

JEL Classification: J41, J61, 030

Suggested Citation

Armstrong, Chris S. and Glaeser, Stephen and Park, Stella Y. and Timmermans, Oscar, The Assignment of Intellectual Property Rights and Innovation (April 14, 2024). Available at SSRN: https://ssrn.com/abstract=3724041 or http://dx.doi.org/10.2139/ssrn.3724041

Chris S. Armstrong

Stanford Graduate School of Business ( email )

655 Knight Way
E316
Stanford, CA 94305-5015
United States

HOME PAGE: http://https://www.gsb.stanford.edu/faculty-research/faculty/christopher-s-armstrong

Stephen Glaeser (Contact Author)

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

Stella Y. Park

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Oscar Timmermans

London School of Economics ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

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