Difference between revisions of "PTLR Core Group Processed BibTeX"
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| − | This page is part of the [[Patent Thicket | + | This page is part of the [[Patent Thicket Literature Review]] |
==Notes== | ==Notes== | ||
| − | This page contains the | + | This page contains the Core Group BibTeX entries in various stages of processing. When processed the BibTeX is used to create a [[PTLR Core Papers|core papers]] page for each paper, and the filename of the paper becomes a link to its page. |
==The Processed Core Group BibTeX Records== | ==The Processed Core Group BibTeX Records== | ||
| Line 9: | Line 9: | ||
===Papers with reviews in progress=== | ===Papers with reviews in progress=== | ||
| − | For the reviews see the [[PTLR Core Papers]] page. | + | For the reviews see the [[PTLR Core Papers]] page. Note that these BibTeX entries have been editting without editting the entries in their pages. Links to the pages are available through the filename tag. |
| + | |||
| + | @article{bessen2003patent, | ||
| + | title={Patent Thickets: Strategic Patenting of Complex Technologies}, | ||
| + | author={Bessen, J.}, | ||
| + | journal={Available at SSRN 327760}, | ||
| + | year={2003}, | ||
| + | abstract={Patent race models assume that an innovator wins the only patent covering a product. But when technologies are complex, this property right is defective: ownership of a product’s technology is shared, not exclusive. In that case I show that if patent standards are low, firms build “thickets” of patents, especially incumbent firms in mature industries. When they assert these patents, innovators are forced to share rents under cross-licenses, making R&D incentives sub-optimal. On the other hand, when lead time advantages are significant and patent standards are high, firms pursue strategies of "mutual non-aggression." Then R&D incentives are stronger, even optimal.}, | ||
| + | discipline={Econ}, | ||
| + | research_type={Theory}, | ||
| + | industry={General, ICT}, | ||
| + | thicket_stance={Pro}, | ||
| + | thicket_stance_extract={This paper argues that patent thickets can reduce R&D incentives even when there are no transaction costs, holdup or vertical monopoly problems.}, | ||
| + | thicket_def={#A, #C1-T, References Heller/Eisenberg, References Shapiro, Dubious Patents, Diversely-Held, Transaction Costs, Strategic Patenting (Bad)}, | ||
| + | thicket_def_extract={The problem Baker describes is often called a "patent thicket." These occur when each product may involve many patents, in contrast with the one-to-one correspondence between products and patents that is assumed in the patent race literature. Recent commentators suggest that lower patenting standards encourage patent thickets, creating difficulties for innovators (see Gallini, 2002, for a review). When innovators must negotiate with large numbers of patentholders, they may face excessive transaction costs (Heller and Eisenberg, 1998), "holdup," and problems of vertical monopoly (Shapiro, 2001).}, | ||
| + | tags={#Core Paper, Private Mechanisms, Cross-licensing, Pools, Firm Strategy, Blocking Patents, Sequential Innovation}, | ||
| + | filename={[[Bessen (2003) - Patent Thickets Strategic Patenting Of Complex Technologies]].pdf} | ||
| + | } | ||
@article{clarkson2004objective, | @article{clarkson2004objective, | ||
| Line 17: | Line 34: | ||
year={2004}, | year={2004}, | ||
abstract={When organizations in technology industries attempt to advance their innovative activities, they almost always must be cognizant of the intellectual property rights of others. When further innovation is thwarted, however, the situation can be described as a patent thicket. Although the term “patent thicket” seems to have originated in litigation in the 1970s regarding Xerox’s dominance of a portion of the photocopier industry,1 economist Carl Shapiro reintroduced the term in academic discourse in 2000. Shapiro defines a patent thicket more broadly to encompass the intellectual property portfolios of several companies that form “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology,” and he points out that “with cumulative innovation and multiple blocking patents, … patent rights can have the perverse effect of stifling, not encouraging, innovation” (2000, pg. 120). Despite all that has been written about patent thickets,2 an objective methodology for verifying the existence of a patent thicket has never been developed. Throughout the last 150 years, however, organizations have stumbled into a number of patent thickets and have occasionally responded by constructing patent pools, which this paper defines as organizational structures where multiple firms collectively aggregate patent rights into a package for licensing, either among themselves or to any potential licensees irrespective of membership in the pool. Such collaboration among technologically competing firms, however, has often encountered difficulty from an antitrust standpoint, even if the formation of the pool is pro-competitive. While the existence of a patent thicket is a necessary but insufficient condition for demonstrating that a given collection of patents is a pro-competitive solution to a particular patent thicket problem, the antitrust regime has never had an objective method of verifying the existence of a patent thicket in a given section of patent space. In response to the lack of such a methodology, this paper proposes a tool to facilitate objectively demonstrating the existence of patent thickets.}, | abstract={When organizations in technology industries attempt to advance their innovative activities, they almost always must be cognizant of the intellectual property rights of others. When further innovation is thwarted, however, the situation can be described as a patent thicket. Although the term “patent thicket” seems to have originated in litigation in the 1970s regarding Xerox’s dominance of a portion of the photocopier industry,1 economist Carl Shapiro reintroduced the term in academic discourse in 2000. Shapiro defines a patent thicket more broadly to encompass the intellectual property portfolios of several companies that form “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology,” and he points out that “with cumulative innovation and multiple blocking patents, … patent rights can have the perverse effect of stifling, not encouraging, innovation” (2000, pg. 120). Despite all that has been written about patent thickets,2 an objective methodology for verifying the existence of a patent thicket has never been developed. Throughout the last 150 years, however, organizations have stumbled into a number of patent thickets and have occasionally responded by constructing patent pools, which this paper defines as organizational structures where multiple firms collectively aggregate patent rights into a package for licensing, either among themselves or to any potential licensees irrespective of membership in the pool. Such collaboration among technologically competing firms, however, has often encountered difficulty from an antitrust standpoint, even if the formation of the pool is pro-competitive. While the existence of a patent thicket is a necessary but insufficient condition for demonstrating that a given collection of patents is a pro-competitive solution to a particular patent thicket problem, the antitrust regime has never had an objective method of verifying the existence of a patent thicket in a given section of patent space. In response to the lack of such a methodology, this paper proposes a tool to facilitate objectively demonstrating the existence of patent thickets.}, | ||
| − | discipline={Econ | + | discipline={Econ}, |
research_type={Measures}, | research_type={Measures}, | ||
| − | industry={}, | + | industry={General, ICT}, |
| − | thicket_stance={}, | + | thicket_stance={Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={The numerical analysis of the PRK pool leads to the conclusion that the PRK pool is coincident with a thicket, as does a visual examination of renderings of the PRK pool network and its nearby universe... Answering the question of thicket existence is thus a first step toward empirical usefulness of the theoretical BCIS framework. The proposed methodology thus provides a foundation for further exploration of the nature of patent thickets and the development of policies to facilitate the formation of procompetitive patent pools to solve the problem posed by patent thickets.}, |
| − | thicket_def={Quotes Shapiro, References Shapiro, References Heller/Eisenberg, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism, Overlapping Patents, Complementary Inputs, Hold-up, Cummulative Invention}, | + | thicket_def={#A-T, #B-T, Quotes Shapiro, References Shapiro, References Heller/Eisenberg, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism, Overlapping Patents, Complementary Inputs, Hold-up, Cummulative Invention}, |
thicket_def_extract={Although the term “patent thicket” seems to have originated in litigation in the 1970s regarding Xerox’s dominance of a portion of the photocopier industry,1 economist Carl Shapiro reintroduced the term in academic discourse in 2000. Shapiro defines a patent thicket more broadly to encompass the intellectual property portfolios of several companies that form “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology,” and he points out that “with cumulative innovation and multiple blocking patents, … patent rights can have the perverse effect of stifling, not encouraging, innovation”... While the existence of a patent thicket is a necessary but insufficient condition for demonstrating that a given collection of patents is a pro-competitive solution to a particular patent thicket problem, the antitrust regime has never had an objective method of verifying the existence of a patent thicket in a given section of patent space... Patent thickets are not a new phenomenon, and when the total number of owners of the conflicting intellectual property rights is small, the response to the patent thicket problem has often been to cross-license (Grindley & Teece 1997; Teece 1998; Teece 2000). When more than two parties are involved, however, the transaction costs of cross-licensing between all of the parties can be prohibitive, and additional economic barriers exist such as hold-ups and double marginalization... Particularly in the biopharmaceutical industry, patent thickets threaten the process of cumulative innovation because they act “as barriers to entry [that prevent new entrants] from using the technologies protected by such patent thickets”... The standard taxonomy categorizes the economic relationship between individual patents as blocking, complementary, independent, or substitute (Andewelt 1984; Newberg 2000), or “BCIS.” The elimination of substitutes is also a necessary but insufficient condition for a pro-competitive pooling solution to a patent thicket... Given that Shapiro defines a patent thicket as “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology” (2000, pg. 120), measuring density is a logical direction of inquiry. Building upon his premise that a patent pool is a natural market-clearing mechanism that forms within a patent thicket, it should be possible to verify that the density of patents within known pools is higher than the surrounding patent space. If the density measures of established pools are significantly higher than the density of their surrounding patent space, that finding will contribute a new dimension to the definition of patent thickets}, | thicket_def_extract={Although the term “patent thicket” seems to have originated in litigation in the 1970s regarding Xerox’s dominance of a portion of the photocopier industry,1 economist Carl Shapiro reintroduced the term in academic discourse in 2000. Shapiro defines a patent thicket more broadly to encompass the intellectual property portfolios of several companies that form “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology,” and he points out that “with cumulative innovation and multiple blocking patents, … patent rights can have the perverse effect of stifling, not encouraging, innovation”... While the existence of a patent thicket is a necessary but insufficient condition for demonstrating that a given collection of patents is a pro-competitive solution to a particular patent thicket problem, the antitrust regime has never had an objective method of verifying the existence of a patent thicket in a given section of patent space... Patent thickets are not a new phenomenon, and when the total number of owners of the conflicting intellectual property rights is small, the response to the patent thicket problem has often been to cross-license (Grindley & Teece 1997; Teece 1998; Teece 2000). When more than two parties are involved, however, the transaction costs of cross-licensing between all of the parties can be prohibitive, and additional economic barriers exist such as hold-ups and double marginalization... Particularly in the biopharmaceutical industry, patent thickets threaten the process of cumulative innovation because they act “as barriers to entry [that prevent new entrants] from using the technologies protected by such patent thickets”... The standard taxonomy categorizes the economic relationship between individual patents as blocking, complementary, independent, or substitute (Andewelt 1984; Newberg 2000), or “BCIS.” The elimination of substitutes is also a necessary but insufficient condition for a pro-competitive pooling solution to a patent thicket... Given that Shapiro defines a patent thicket as “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology” (2000, pg. 120), measuring density is a logical direction of inquiry. Building upon his premise that a patent pool is a natural market-clearing mechanism that forms within a patent thicket, it should be possible to verify that the density of patents within known pools is higher than the surrounding patent space. If the density measures of established pools are significantly higher than the density of their surrounding patent space, that finding will contribute a new dimension to the definition of patent thickets}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Clarkson (2004) - Objective Identification Of Patent Thickets A Network Analytic Approach]].pdf} | filename={[[Clarkson (2004) - Objective Identification Of Patent Thickets A Network Analytic Approach]].pdf} | ||
} | } | ||
| Line 34: | Line 51: | ||
year={2005}, | year={2005}, | ||
abstract={When organizations in technology industries attempt to advance their innovative activities, they may encounter patent thickets, or dense webs of overlapping intellectual property rights owned by different companies that must be hacked through in order to commercialize new technology. Throughout the last 150 years, however, organizations have stumbled into a number of patent thickets and have occasionally responded by constructing patent pools or organizational structures where multiple firms collectively aggregate patent rights into a package for licensing, either among themselves or to any potential licensees irrespective of membership in the pool. Such collaboration among technologically competing firms, however, has often encountered difficulty from an antitrust standpoint, even if the formation of the pool is pro-competitive. Despite all that has been written lamenting the problem of patent thickets, the antitrust regime has never had an objective method of verifying the existence of a patent thicket in a given section of patent space. In response to the lack of such a methodology, this paper proposes a tool to facilitate objectively demonstrating the existence of patent thickets. This paper proposes a thicket identification methodology that uses a network analytic technique to determine if a patent pool is coincident with a patent thicket by comparing the density of the patent pool to the density of the surrounding patent space. This paper then applies the new methodology to two existing patent pools and verifies the existence of underlying patent thickets.... Patent thickets are not a new phenomenon, and when the total number of owners of the conflicting intellectual property rights is small, the response to the patent thicket problem has often been to cross-license (Grindley & Teece 1997; Teece 1998; Teece 2000). When more than two parties are involved, however, the transaction costs of cross-licensing between all of the parties can be prohibitive, and additional economic barriers exist such as hold-ups and double marginalization (Viscusi et al. 2000).}, | abstract={When organizations in technology industries attempt to advance their innovative activities, they may encounter patent thickets, or dense webs of overlapping intellectual property rights owned by different companies that must be hacked through in order to commercialize new technology. Throughout the last 150 years, however, organizations have stumbled into a number of patent thickets and have occasionally responded by constructing patent pools or organizational structures where multiple firms collectively aggregate patent rights into a package for licensing, either among themselves or to any potential licensees irrespective of membership in the pool. Such collaboration among technologically competing firms, however, has often encountered difficulty from an antitrust standpoint, even if the formation of the pool is pro-competitive. Despite all that has been written lamenting the problem of patent thickets, the antitrust regime has never had an objective method of verifying the existence of a patent thicket in a given section of patent space. In response to the lack of such a methodology, this paper proposes a tool to facilitate objectively demonstrating the existence of patent thickets. This paper proposes a thicket identification methodology that uses a network analytic technique to determine if a patent pool is coincident with a patent thicket by comparing the density of the patent pool to the density of the surrounding patent space. This paper then applies the new methodology to two existing patent pools and verifies the existence of underlying patent thickets.... Patent thickets are not a new phenomenon, and when the total number of owners of the conflicting intellectual property rights is small, the response to the patent thicket problem has often been to cross-license (Grindley & Teece 1997; Teece 1998; Teece 2000). When more than two parties are involved, however, the transaction costs of cross-licensing between all of the parties can be prohibitive, and additional economic barriers exist such as hold-ups and double marginalization (Viscusi et al. 2000).}, | ||
| − | discipline={ | + | discipline={Econ}, |
research_type={Measures}, | research_type={Measures}, | ||
| − | industry={}, | + | industry={General, ICT}, |
| − | thicket_stance={}, | + | thicket_stance={Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={The numerical analysis of the PRK pool leads to the conclusion that the PRK pool is coincident with a thicket, as does a visual examination of renderings of the PRK pool network and its nearby universe... Although the proposed methodology does not attempt to assess the BCIS relationships within a patent thicket, this paper is the first attempt to objectively demonstrate the existence of patent thickets.}, |
| − | thicket_def={Quotes Shapiro, References Shapiro, References Heller/Eisenberg, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism, Overlapping Patents, Complementary Inputs, Hold-up, Cummulative Invention}, | + | thicket_def={#A-T, #B-T, Quotes Shapiro, References Shapiro, References Heller/Eisenberg, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism, Overlapping Patents, Complementary Inputs, Hold-up, Cummulative Invention}, |
thicket_def_extract={When organizations in technology industries attempt to advance their innovative activities, they may encounter patent thickets, or dense webs of overlapping intellectual property rights owned by different companies that must be hacked through in order to commercialize new technology... Using Shapiro’s definition of a patent thicket as the starting point, two conditions must be satisfied in order for a collection of patents to be a patent thicket: the collection of patents must be both “dense” and “overlapping”(2000, pg. 120).}, | thicket_def_extract={When organizations in technology industries attempt to advance their innovative activities, they may encounter patent thickets, or dense webs of overlapping intellectual property rights owned by different companies that must be hacked through in order to commercialize new technology... Using Shapiro’s definition of a patent thicket as the starting point, two conditions must be satisfied in order for a collection of patents to be a patent thicket: the collection of patents must be both “dense” and “overlapping”(2000, pg. 120).}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Clarkson (2005) - Patent Informatics For Patent Thicket Detection]].pdf} | filename={[[Clarkson (2005) - Patent Informatics For Patent Thicket Detection]].pdf} | ||
} | } | ||
| Line 57: | Line 74: | ||
research_type={Discussion}, | research_type={Discussion}, | ||
industry={Nanotech}, | industry={Nanotech}, | ||
| − | thicket_stance={}, | + | thicket_stance={Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={After presenting visual evidence of the presence of nanothickets using a network analytic technique, it discusses potential organizational responses to patent thickets..}, |
| − | thicket_def={Quotes Shapiro, References Shapiro, References Heller/Eisenberg, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism, Overlapping Patents, Complementary Inputs, Cummulative Invention}, | + | thicket_def={#A-T, #B-T, Quotes Shapiro, References Shapiro, References Heller/Eisenberg, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism, Overlapping Patents, Complementary Inputs, Cummulative Invention}, |
thicket_def_extract={...for the formation of patent thickets. These dense webs of overlapping intellectual property rights owned by different companies (Shapiro 2000) can present a significant barrier that must be hacked through in order to commercialize new technology. In other industries characterized by cumulative innovations and multiple blocking patents, the existence of such densely concentrated patent rights can have the perverse effect of stifling innovation rather than encouraging it. Such patent thickets are already problematic in other convergent technology areas such as biotechnology (Heller and Eisenberg 1998; Clark et al. 2000; Horn 2003) and information technology (Clarkson 2004)... When multiple organizations each own individual patents that are collectively necessary for a particular technology, however, their competing intellectual property rights form a “patent thicket”}, | thicket_def_extract={...for the formation of patent thickets. These dense webs of overlapping intellectual property rights owned by different companies (Shapiro 2000) can present a significant barrier that must be hacked through in order to commercialize new technology. In other industries characterized by cumulative innovations and multiple blocking patents, the existence of such densely concentrated patent rights can have the perverse effect of stifling innovation rather than encouraging it. Such patent thickets are already problematic in other convergent technology areas such as biotechnology (Heller and Eisenberg 1998; Clark et al. 2000; Horn 2003) and information technology (Clarkson 2004)... When multiple organizations each own individual patents that are collectively necessary for a particular technology, however, their competing intellectual property rights form a “patent thicket”}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Clarkson DeKorte (2006) - The Problem Of Patent Thickets In Convergent Technologies]].pdf} | filename={[[Clarkson DeKorte (2006) - The Problem Of Patent Thickets In Convergent Technologies]].pdf} | ||
} | } | ||
| − | @article{ | + | @article{cockburn2011entry, |
title={Entry and Patenting in the Software Industry}, | title={Entry and Patenting in the Software Industry}, | ||
| − | author={Cockburn, I.M. and | + | author={Cockburn, I.M. and Macgarvie, M.J.}, |
| − | + | journal={Management science}, | |
| − | + | volume={57}, | |
| − | + | number={5}, | |
| − | abstract={To what extent are firms kept out of a market by patents covering related technologies? Do patents held by potential entrants make it easier to enter markets? We estimate the empirical relationship between market entry and patents for 27 narrowly defined categories of software products during the period | + | pages={915--933}, |
| + | year={2011}, | ||
| + | abstract={To what extent are firms kept out of a market by patents covering related technologies? Do patents held by potential entrants make it easier to enter markets? We estimate the empirical relationship between market entry and patents for 27 narrowly defined categories of software products during the period 1990-2004. Controlling for demand, market structure, patent quality, and other factors, we find that a 10% increase in the number of patents relevant to market reduces the rate of entry by 3-8%, and this relationship intensified following expansions in the patentability of software in the mid- 1990s. However, potential entrants with patent applications relevant to a market are 2-3 times more likely to enter it. Finally, patents appear to substitute for complementary assets in the entry process, as patents have both greater entry-deterring and entrypromoting effects for firms without prior experience in other markets.}, | ||
discipline={Mgmt}, | discipline={Mgmt}, | ||
research_type={Empirical}, | research_type={Empirical}, | ||
industry={Software}, | industry={Software}, | ||
| − | thicket_stance={}, | + | thicket_stance={Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={Patent thickets, at least as measured here, thus appear to substantially raise entry costs. This is not to say that the overall effect of strengthening software patents was necessarily negative, at least in an absolute sense. The markets in our sample saw substantial overall growth in sales and in the number of participants during this period. Any negative impact of patent thickets on entry is felt as forgone potential for even higher rates of entry, and this may be mitigated by the stimulating effects of stronger patent protection. As discussed above, strengthening or clarifying property rights has potential benefits as well as costs, and we estimate a positive and significant main effect of regime changes on entry, all else equal. But transactions costs associated with thickets may have interesting dynamic effects: while incumbents enjoy increased protection for current innovations, larger thickets will also raise their costs of introducing future generations of innovations. With both entrants and incumbents facing strong incentives to acquire patents, which in turn contribute to even larger thickets and higher associated transactions costs, all market participants can become negatively affected. These dynamics may underlie opportunities emerging for new organizational forms and business models that eliminate (or arbitrage) transactions costs associated with patent thickets.}, |
| − | thicket_def={ | + | thicket_def={#A-T, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism, Cummulative Invention}, |
| − | thicket_def_extract={ | + | thicket_def_extract={As all industry participants have responded to increased incentives to obtain patents, the “thicket” in these markets has grown dramatically, imposing greater and greater transactions costs on all firms.... As discussed above, it may not be just the absolute number of patents in an area that can deter entry, but also the total cost to an entrant of licensing its way through the thicket. One salient feature of patent thickets is the potential for higher costs associated with negotiating with many parties. To the extent that there are fixed costs of conducting a negotiation, having to deal with more parties will drive up costs of obtaining licenses. There may also be transactions costs associated with bargaining and coordinating negotiations with multiple licensors... But transactions costs associated with thickets may have interesting dynamic effects: while incumbents enjoy increased protection for current innovations, larger thickets will also raise their costs of introducing future generations of innovations.}, |
| − | tags={}, | + | tags={#Core Paper}, |
| − | filename={[[Cockburn | + | filename={[[Cockburn Macgarvie (2011) - Entry And Patenting In The Software Industry]].pdf} |
} | } | ||
| Line 95: | Line 114: | ||
research_type={Empirical}, | research_type={Empirical}, | ||
industry={Software}, | industry={Software}, | ||
| − | thicket_stance={}, | + | thicket_stance={Weak Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={Start-up software companies operating in markets characterized by denser patent thickets see their initial acquisition of VC or corporate funding delayed relative to firms in markets less affected by patents. This effect does not appear to be present on average once funding has been obtained and new ventures have become incumbents. If anything, our market-level estimates of the conditional correlation between the number of IPOs in a market and the patents in force there suggest that firms operating in markets with a large number of patents may be more attractive to investors in public markets, stimulating IPO activity and thus the payoff to early-stage investors.}, |
| − | thicket_def={Quotes Shapiro, References Shapiro, Broad Patents, Dubious Patents, Overlapping Patents, Cummulative Invention, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism}, | + | thicket_def={#A-ST, #B1-ST, Quotes Shapiro, References Shapiro, Broad Patents, Dubious Patents, Overlapping Patents, Cummulative Invention, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism}, |
thicket_def_extract={With more than 100,000 software patents issued in the US since 1990, and ever-greater complexity and scale of software products, industry participants face an increasingly forbidding “thicket” of IP. With even quite modest products containing millions of lines of code and thousands or tens of thousand of inter-related component modules, any of which could potentially infringe one or more patents, the cost of “clearing” new products for potential infringement can be very large. Allegedly poor standards of patent examination in this area in the past may also have generated large numbers of patents with inadequate disclosure, and excessively broad claims, raising the costs of determining the scope of existing IP, and increasing uncertainty about possible future litigation from competitors and non-competitors alike... a patent “thicket”—i.e. a “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology”... Following Hall and Ziedonis (2003) and Ziedonis (2005), we hypothesize that start-up companies with patents will be able to use them in cross-licensing negotiations to defend themselves against litigation. These patents may then act to reduce the transaction costs associated with operating in a “thicketed” market... However, it may not be just the absolute number of patents in an area that can deter entry, but also the extent to which those patents form a “thicket” in the sense of generating transactions costs above and beyond simple blocking power. As Shapiro (2001) puts it, “a patent thicket is a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology. With cumulative innovation and multiple blocking patents, stronger patent rights can thus have the perverse effect of stifling, not encouraging, innovation.”14 Ziedonis (2004) and Noel and Schankerman (2006) argue that a key factor driving transactions costs may be the degree to which ownership of patent rights is fragmented. Suppose a prospective entrant were to obtain licenses from holders of blocking patents.}, | thicket_def_extract={With more than 100,000 software patents issued in the US since 1990, and ever-greater complexity and scale of software products, industry participants face an increasingly forbidding “thicket” of IP. With even quite modest products containing millions of lines of code and thousands or tens of thousand of inter-related component modules, any of which could potentially infringe one or more patents, the cost of “clearing” new products for potential infringement can be very large. Allegedly poor standards of patent examination in this area in the past may also have generated large numbers of patents with inadequate disclosure, and excessively broad claims, raising the costs of determining the scope of existing IP, and increasing uncertainty about possible future litigation from competitors and non-competitors alike... a patent “thicket”—i.e. a “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology”... Following Hall and Ziedonis (2003) and Ziedonis (2005), we hypothesize that start-up companies with patents will be able to use them in cross-licensing negotiations to defend themselves against litigation. These patents may then act to reduce the transaction costs associated with operating in a “thicketed” market... However, it may not be just the absolute number of patents in an area that can deter entry, but also the extent to which those patents form a “thicket” in the sense of generating transactions costs above and beyond simple blocking power. As Shapiro (2001) puts it, “a patent thicket is a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology. With cumulative innovation and multiple blocking patents, stronger patent rights can thus have the perverse effect of stifling, not encouraging, innovation.”14 Ziedonis (2004) and Noel and Schankerman (2006) argue that a key factor driving transactions costs may be the degree to which ownership of patent rights is fragmented. Suppose a prospective entrant were to obtain licenses from holders of blocking patents.}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Cockburn MacGarvie (2009) - Patents Thickets And The Financing Of Early Stage Firms]].pdf} | filename={[[Cockburn MacGarvie (2009) - Patents Thickets And The Financing Of Early Stage Firms]].pdf} | ||
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year={2010}, | year={2010}, | ||
abstract={We examine the relationship between fragmented intellectual property (IP) rights and the innovative performance of firms, taking into consideration the role played by in-licensing of IP. We find that firms facing more fragmented IP landscapes have a higher probability of in-licensing. We observe a negative relationship between IP fragmentation and innovative performance, but only for firms that engage in in-licensing. In contrast, greater IP fragmentation is associated with higher innovative performance for firms that do not in-license. Furthermore, the effects of fragmentation on innovation also appear to depend on the size of a firm’s patent portfolio. These results suggest that the effects of fragmentation of upstream IP rights are not uniform, and instead vary according to the characteristics of the downstream firm.}, | abstract={We examine the relationship between fragmented intellectual property (IP) rights and the innovative performance of firms, taking into consideration the role played by in-licensing of IP. We find that firms facing more fragmented IP landscapes have a higher probability of in-licensing. We observe a negative relationship between IP fragmentation and innovative performance, but only for firms that engage in in-licensing. In contrast, greater IP fragmentation is associated with higher innovative performance for firms that do not in-license. Furthermore, the effects of fragmentation on innovation also appear to depend on the size of a firm’s patent portfolio. These results suggest that the effects of fragmentation of upstream IP rights are not uniform, and instead vary according to the characteristics of the downstream firm.}, | ||
| − | discipline={ | + | discipline={Econ}, |
research_type={Empirical}, | research_type={Empirical}, | ||
| − | industry={}, | + | industry={Manufacturing}, |
| − | thicket_stance={}, | + | thicket_stance={Weak Anti}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={While businesses, economists and policy-makers arguably have a relatively clear understanding of the private benefits of patents to the firms that hold them, as well as the more general benefits of the innovative activity patents help stimulate, we still lack a complete picture of the possible negative externalities associated with patent thickets. In particular there is to date little evidence on which types of firms are most affected, and this article helps fill this gap in our understanding. Perhaps our most salient findings are those about the effects of IP fragmentation on in-licensing firms with small patent portfolios, many of whom are young, small firms. Entrepreneurial firms are an important source of innovation and a driver of economic growth, and it is thus important from a policy perspective to know whether patent thickets are particularly pernicious for these firms. However, it is striking that we do not observe any significant negative correlation between fragmentation and innovative sales more generally, and we even estimate a positive correlation between fragmentation and innovative sales among firms that do not in-license. This heterogeneity in the estimated effects of fragmentation suggests that there is no straightforward, uniform relationship between patent thickets and innovation for all firms. This latter finding suggests the need for further research on the potentially varying impacts of patent thickets.}, |
thicket_def={Overlapping Patents, Cummulative Invention, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism}, | thicket_def={Overlapping Patents, Cummulative Invention, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism}, | ||
| − | thicket_def_extract={A debate has also emerged over the extent to which patent “thickets” may stifle innovation. Defined by Shapiro (2001) as “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology”, patent thickets may raise transactions costs associated with contracting around existing patents to the point at which the costs associated with patents may outweigh any positive impact on R&D incentives. The potential for patent thickets to stifle innovation depends on the extent to which they raise the costs of innovators. In general, patents held by one firm are likely to impose some costs on other innovators, such as incremental R&D expenditures to design around patents, or licensing fees paid for rights to use patented technology. Where there is a patent “thicket” these costs may be large enough to materially impact incentives to innovate, and in the extreme case, an “impenetrable” patent thicket may completely block inventors from accessing some technologies, or make it prohibitively costly to bring improvements to market. These situations are thought to be most likely to occur where innovation is strongly cumulative, or products are highly complex (in the sense of containing many different independently patented components), so that there are potentially multiple blocking patents that an innovator would have to work around or gain access to.}, | + | thicket_def_extract={#A-T, A debate has also emerged over the extent to which patent “thickets” may stifle innovation. Defined by Shapiro (2001) as “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology”, patent thickets may raise transactions costs associated with contracting around existing patents to the point at which the costs associated with patents may outweigh any positive impact on R&D incentives. The potential for patent thickets to stifle innovation depends on the extent to which they raise the costs of innovators. In general, patents held by one firm are likely to impose some costs on other innovators, such as incremental R&D expenditures to design around patents, or licensing fees paid for rights to use patented technology. Where there is a patent “thicket” these costs may be large enough to materially impact incentives to innovate, and in the extreme case, an “impenetrable” patent thicket may completely block inventors from accessing some technologies, or make it prohibitively costly to bring improvements to market. These situations are thought to be most likely to occur where innovation is strongly cumulative, or products are highly complex (in the sense of containing many different independently patented components), so that there are potentially multiple blocking patents that an innovator would have to work around or gain access to.}, |
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Cockburn MacGarvie Muller (2010) - Patent Thickets Licensing And Innovative Performance]].pdf} | filename={[[Cockburn MacGarvie Muller (2010) - Patent Thickets Licensing And Innovative Performance]].pdf} | ||
} | } | ||
| Line 150: | Line 149: | ||
discipline={Mgmt}, | discipline={Mgmt}, | ||
research_type={Empirical}, | research_type={Empirical}, | ||
| − | industry={}, | + | industry={Manufacturing}, |
| − | thicket_stance={}, | + | thicket_stance={Weak Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={The pro-patent shift of the United States has created a patent thicket... My results show that firms experience a significant decline in their market value when the technology market is fragmented. The results also show that the pro-patent shift in the 1980s has increased the size of this impact. I also find that firms with larger patent portfolios experience a smaller negative premium in their market value. This is likely because firms with larger patent portfolios face fewer problems in their cross-licensing negotiations with external entities as the larger portfolio size increases their bargaining power in the licensing negotiations and lowers the risk of being held-up by their rivals... My results also show that the negative impact of the patent thicket varies across industries. For example, the impact is insignificant in the pharmaceutical sector, but significant in the chemical and mechanical sectors.}, |
| − | thicket_def={Overlapping Patents, Cummulative Invention, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up, Unspecified Blocking Mechanism}, | + | thicket_def={#A-T, Overlapping Patents, Cummulative Invention, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up, Unspecified Blocking Mechanism}, |
thicket_def_extract={I study how the fragmentation of the ownership of complementary patents impacts the market value of the firm. This fragmentation builds a patent thicket, which contains a set of overlapping patents.3 The patent thicket requires obtaining permission from several right holders to commercialize a product. Firms that face a fragmented technology market have to pay higher transaction costs and royalty payments to license external patents, because they are confronted with larger number of entities in the thicket. They are more prone to opportunistic behaviour by external entities, since the likelihood of infringing other firms’ patents is high. They are also more exposed to the risk of being litigated against by other patent holders. The patent thickets hold several costs for the firms with cumulative innovations. They cause the “complement problem” which was first formally examined by Cournot (1838).12 Shapiro (2001) extends the Cournot idea into the context of intellectual property. He indicates right holders in the thicket make the prices of invented products much larger than their marginal costs by imposing the licensing fees. The result is lower consumer welfare and joint profit of right holders. Heller and Eisenberg (1998) also show that the licensing fees in the thicket lead to underinvestment in innovation or the “tragedy of anti-commons.” Furthermore, Shapiro (2001) shows that the dense thickets increase the transaction costs of firms, because identifying complementary patents is harder and more costly. Innovators usually find about all of the patents after bearing sunk costs. This means the innovator is faced with a hold-up problem.}, | thicket_def_extract={I study how the fragmentation of the ownership of complementary patents impacts the market value of the firm. This fragmentation builds a patent thicket, which contains a set of overlapping patents.3 The patent thicket requires obtaining permission from several right holders to commercialize a product. Firms that face a fragmented technology market have to pay higher transaction costs and royalty payments to license external patents, because they are confronted with larger number of entities in the thicket. They are more prone to opportunistic behaviour by external entities, since the likelihood of infringing other firms’ patents is high. They are also more exposed to the risk of being litigated against by other patent holders. The patent thickets hold several costs for the firms with cumulative innovations. They cause the “complement problem” which was first formally examined by Cournot (1838).12 Shapiro (2001) extends the Cournot idea into the context of intellectual property. He indicates right holders in the thicket make the prices of invented products much larger than their marginal costs by imposing the licensing fees. The result is lower consumer welfare and joint profit of right holders. Heller and Eisenberg (1998) also show that the licensing fees in the thicket lead to underinvestment in innovation or the “tragedy of anti-commons.” Furthermore, Shapiro (2001) shows that the dense thickets increase the transaction costs of firms, because identifying complementary patents is harder and more costly. Innovators usually find about all of the patents after bearing sunk costs. This means the innovator is faced with a hold-up problem.}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Entezarkheir (2010) - Patent Thickets And Market Value An Empirical Analysis]].pdf} | filename={[[Entezarkheir (2010) - Patent Thickets And Market Value An Empirical Analysis]].pdf} | ||
| + | } | ||
| + | |||
| + | @article{epo2013workshop, | ||
| + | title={Workshop on Patent Thickets}, | ||
| + | author={EPC, Economic and Scientific Advisory Board}, | ||
| + | journal={European Patent Office Recommendations, Available at http://www.epo.org/news-issues/news/2013/20130313.html}, | ||
| + | year={2013}, | ||
| + | abstract={This report represents the summary and synthesis of the ESAB workshop on patent thickets that was held on 26 September 2012 in Leuven, Belgium. This was the third workshop in a series held in 2012, comprising the role and structure of fees, patent quality, and patent thickets. Separate reports were produced for each topic. The workshop on patent thickets was designed to (1) encourage the exchange of thoughts from different stakeholders and discover their perceptions of patent thickets; (2) ponder sectoral differences, both in incidence and impact; (3) suggest ideas for future research; and (4) suggest possible institutional approaches to address challenges raised by the existence of patent thickets and the implications of those approaches for different stakeholders. Other important considerations were the role of standards, royalty stacking, compulsory licensing, and patent pools. Early discussions centred around the definition and incidence of patent thickets and there was widespread agreement on what the term represents. A patent thicket conjures up the image of a bramble, a large dense bush with thorns on the branches making it difficult to pass through without getting severely scratched. Thus a patent thicket usually involves (1) multiple patents on (2) the same, similar, or complementary technologies, (3) held by different parties, making it difficult to negotiate intellectual property rights (for example, licensing agreements) to the point where some scholars feel it might be socially inefficient.}, | ||
| + | discipline={Policy Report}, | ||
| + | research_type={Discussion}, | ||
| + | industry={General}, | ||
| + | thicket_stance={Weak Anti}, | ||
| + | thicket_stance_extract={The final plenary session was designed to reach conclusions about patent thickets. There was extensive debate about whether patent thickets are a problem per se, and the experts could not agree on that issue. Generally speaking, industry-based experts were less concerned about patent thickets as an insurmountable problem than experts from other organisations. However, everyone was able to agree that managing patent thickets appears to be part of a broader discussion about managing innovation and complexity, and that successful firms need to develop multi-dimensional strategies to cope with complexity. All breakout groups independently and in plenary agreed that patent thickets are a natural outcome (or symptom) of the other aspects of the current system and that there is no way to reduce the incidence of patent thickets in a vacuum. It was suggested that there is no "patent thicket" problem as such.}, | ||
| + | thicket_def={#A-T, #B, Quotes Shapiro, References Shapiro, References Heller/Eisenberg, Complementary Inputs, Diversely-Held, Transaction Costs, Overlapping Patents}, | ||
| + | thicket_def_extract={Thus a patent thicket usually involves (1) multiple patents on (2) the same, similar, or complementary technologies, (3) held by different parties, making it difficult to negotiate intellectual property rights (for example, licensing agreements) to the point where some scholars feel it might be socially inefficient.... What is a patent thicket? A patent thicket conjures up the image of a thicket, or bramble, a large dense bush with thorns on the branches making it difficult to pass through without getting severely scratched. Thus a patent thicket is a “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology” (Shapiro, 2001, p. 120). This makes it difficult to negotiate intellectual property rights (for example, licensing agreements1), to the point where some observers feel it might be socially inefficient (Bessen & Meurer, 2008b; Scotchmer, 1996). In such a situation, it is argued that strategic uses of the patent system by applicants may be interfering with one of the goals of the system, by obliging innovators to spend inordinate resources on transaction costs to bring new technology that builds on prior work to market. Such high transaction costs, if and when they exist, would tend to discourage innovation rather than encourage it.}, | ||
| + | tags={#Core Paper}, | ||
| + | filename={[[EPO (2012) - Workshop on Patent Thickets]].pdf} | ||
| + | } | ||
| + | |||
| + | @article{epstein2004there, | ||
| + | title={Is there a biomedical anticommons}, | ||
| + | author={Epstein, Richard A and Kuhlik, Bruce N}, | ||
| + | journal={Regulation}, | ||
| + | volume={27}, | ||
| + | pages={54}, | ||
| + | year={2004}, | ||
| + | abstract={Six years ago in science, michael heller and Rebecca Eisenberg asked the disarmingly simple question whether patent protection could deter biomedical research. They treated patent protection as a two-edged sword: Happily, it spurs innovation by securing to inventors the fruits of their labors but, unhappily, it also creates a vast thicket that gives each patent holder a potential veto right over the innovations of others. They dubbed that potentially dangerous veto right “the tragedy of the anticommons.” According to Heller and Eisenberg, that tragedy occurs when property rights are too strong and too many people can block some productive venture. The extent of the anticommons is highly disputed with respect to intellectual property. But, without question, it arises in other contexts. One notable example is sequential monopolists, e.g., toll stations on a river that are operated by rival princes. Because of the multiple tolling, traffic along the river would be sharply reduced, thereby decreasing social welfare by reducing profits for the toll operators and travelers alike. Heller and Eisenberg’s clear implication for patent law is that inventive activity could be reduced as well, as the blocking power of patents stymies innovation by product users. As with the waterways, the total value of the resources under patents (if not the number of patents themselves) should diminish as productive avenues for research cannot be pursued by individuals who are cut off from the nourishment that their own inventive efforts obtain from a rich public domain. The pursuit of private gain leads to a loss of social welfare. Heller and Eisenberg supplied little, if any, empirical evidence for their assertion that the patent blockade dominates patent innovation. Even so, we have witnessed a persistent hue and cry for the weakening of patent protection. In the United Kingdom, the recent Needham Commission Report for the Royal Society decried the expansion of patent activities within university. Closer to home, Congress and the Food and Drug Administration have heard calls for weakening the patent protection supplied under the Hatch-Waxman Amendments to the basic patent and food and drug laws, which govern the relationship between holders of pharmaceutical patents and their eventual generic competitors.}, | ||
| + | discipline={Law}, | ||
| + | research_type={Discussion}, | ||
| + | industry={Biotech, Pharma}, | ||
| + | thicket_stance={Anti}, | ||
| + | thicket_stance_extract={We think that Heller and Eisenberg have overstated the case against patent protection at both the theoretical and empirical levels.}, | ||
| + | thicket_def={#A, #B}, | ||
| + | thicket_def_extract={They dubbed that potentially dangerous veto right “the tragedy of the anticommons.” According to Heller and Eisenberg, that tragedy occurs when property rights are too strong and too many people can block some productive venture.... One reason why the Heller and Eisenberg model fails is that it is based, we believe, on a set of faulty analogies. Above, we instanced the blocking power that exists whenever multiple owners control different segments of a river. In that instance, nature supplies an effect i ve barr ier against any form of innovation that could offer new routes to travel along the river.}, | ||
| + | tags={#Core Paper}, | ||
| + | filename={[[Epstein Kuhlik (2004) - Is There A Biomedical Anticommons]].pdf} | ||
} | } | ||
| Line 170: | Line 205: | ||
research_type={Discussion}, | research_type={Discussion}, | ||
industry={Software}, | industry={Software}, | ||
| − | thicket_stance={}, | + | thicket_stance={Weak Anti}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={Evidence does not support the argument that patents simply are not needed to spur innovation, or that patents block future innovation by causing non-negotiable thickets of rights and reducing the software commons. Arguments like these are based largely on theory with a smattering of anecdotes thrown in, rather than on hard empirical evidence.}, |
| − | thicket_def={References Shapiro, References Heller/Eisenberg, Cummulative Invention, Strategic Patenting (Bad), Unspecified Blocking Mechanism}, | + | thicket_def={#A, #B, References Shapiro, References Heller/Eisenberg, Cummulative Invention, Strategic Patenting (Bad), Unspecified Blocking Mechanism}, |
thicket_def_extract={The theoretical economics literature argues that when innovations are sequential and cumulative, patents may impose more than the typical exclusion-period costs.113 For instance, a patent for an invention early in the innovative process could impose a toll on each sequential innovation that relies on it. Subsequent inventors, therefore, face higher transaction costs––they must pay licensing fees before they can further refine a technology. As the tolls build during the technology’s development path, later research could be discouraged altogether. Alluding to the famous argument for property rights, over-patenting has been dubbed the “tragedy of the anticommons,” as too many people with exclusionary rights can cause underutilization of resources.114 Shapiro uses another metaphor: the patent thicket... Based on the theoretical literature, software patent opponents claim that patent thickets will develop in the software industry. Thus, they assert that patents allow a company or individual to prevent the type of incremental innovation that is so important in the software industry. When small pieces of software that are adaptable to a multitude of applications can be and are patented, it becomes increasingly likely that each complex program will infringe someone’s patent. Therefore, opponents argue that developers have incentives to “over-patent” for strategic or defensive reasons in order to gain leverage in cross-licensing negotiations.119 Strategic patenting results in a patent thicket, an impenetrable barrier to further innovation.}, | thicket_def_extract={The theoretical economics literature argues that when innovations are sequential and cumulative, patents may impose more than the typical exclusion-period costs.113 For instance, a patent for an invention early in the innovative process could impose a toll on each sequential innovation that relies on it. Subsequent inventors, therefore, face higher transaction costs––they must pay licensing fees before they can further refine a technology. As the tolls build during the technology’s development path, later research could be discouraged altogether. Alluding to the famous argument for property rights, over-patenting has been dubbed the “tragedy of the anticommons,” as too many people with exclusionary rights can cause underutilization of resources.114 Shapiro uses another metaphor: the patent thicket... Based on the theoretical literature, software patent opponents claim that patent thickets will develop in the software industry. Thus, they assert that patents allow a company or individual to prevent the type of incremental innovation that is so important in the software industry. When small pieces of software that are adaptable to a multitude of applications can be and are patented, it becomes increasingly likely that each complex program will infringe someone’s patent. Therefore, opponents argue that developers have incentives to “over-patent” for strategic or defensive reasons in order to gain leverage in cross-licensing negotiations.119 Strategic patenting results in a patent thicket, an impenetrable barrier to further innovation.}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Evans LayneFarrar (2004) - Software Patents And Open Source]].pdf} | filename={[[Evans LayneFarrar (2004) - Software Patents And Open Source]].pdf} | ||
} | } | ||
| Line 192: | Line 227: | ||
research_type={Discussion}, | research_type={Discussion}, | ||
industry={General}, | industry={General}, | ||
| − | thicket_stance={}, | + | thicket_stance={Assumed Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={One might call this a “potential-patent thicket,” as distinct from the “actual-patent thicket” that can create multiple-marginalization problems when many patents are known to be infringed by a product.}, |
thicket_def={Complementary Inputs, Diversely-Held}, | thicket_def={Complementary Inputs, Diversely-Held}, | ||
| − | thicket_def_extract={One common and intuitively difficult information problem arises when a producer does not know with whom it must negotiate concerning patents. One might call this a “potential-patent thicket,” as distinct from the “actual-patent thicket” that can create multiple-marginalization problems when many patents are known to be infringed by a product.}, | + | thicket_def_extract={#A, One common and intuitively difficult information problem arises when a producer does not know with whom it must negotiate concerning patents. One might call this a “potential-patent thicket,” as distinct from the “actual-patent thicket” that can create multiple-marginalization problems when many patents are known to be infringed by a product.}, |
| − | tags={SSO, Patent Pools, Cross-licensing}, | + | tags={#Core Paper, SSO, Patent Pools, Cross-licensing}, |
filename={[[Farrell (2009) - Intellectual Property As A Bargaining Environment]].pdf} | filename={[[Farrell (2009) - Intellectual Property As A Bargaining Environment]].pdf} | ||
} | } | ||
| − | @article{ | + | @article{galasso2007broad, |
| − | title={Patent | + | title={Broad Cross-license Agreements and Persuasive Patent Litigation: Theory and Evidence from the Semiconductor Industry}, |
| − | author={Galasso, A. | + | author={Galasso, A.}, |
| − | year={ | + | journal={LSE STICERD Research Paper No. EI45}, |
| − | abstract={ | + | year={2007}, |
| + | abstract={In many industries broad cross-license agreements are considered a useful method to obtain freedom to operate and to avoid patent litigation. In this paper I study the previously neglected dynamic trade-off between litigating and cross-licensing that firms face to protect their intellectual property. I present a model of bargaining with learning in which firms’ decisions to litigate or crosslicense depend on their investments in technology specific assets. In particular the model predicts that where firms’ sunk costs are higher, their incentive to litigate and delay a cross-license agreement is lower. In addition, the bargaining game shows how firms with intermediate values of asset specificity tend to engage in inefficient "persuasive litigation". Using a novel dataset on the US semiconductor industry I obtain empirical results consistent with those suggested by the model. Combining model intuition with some empirical figures, I evaluate possible effects of the currently debated patent litigation reform.}, | ||
discipline={Econ}, | discipline={Econ}, | ||
| − | research_type={Empirical}, | + | research_type={Theory, Empirical}, |
| − | industry={}, | + | industry={General, Semiconductor}, |
| − | thicket_stance={}, | + | thicket_stance={Assumed Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={In particular, Shapiro (2001) has argued that a "patent thicket" has appeared that renders it difficult to commercialize a new technology. In some industries the number of intellectual property rights a firm requires to produce a new product is so large, and their ownership is so dispersed, that it is quite easy to unintentionally infringe on a patent. In this environment there is, therefore, a hold-up problem: when the manufacturer starts selling its product a patentee might show up threatening to shut production down unless it is paid high royalties.}, |
| − | thicket_def={References Shapiro, | + | thicket_def={#A-S, References Shapiro, Unspecified Blocking Mechanism, Diversely-Held, Hold-up}, |
| − | thicket_def_extract={. | + | thicket_def_extract={In particular, Shapiro (2001) has argued that a "patent thicket" has appeared that renders it difficult to commercialize a new technology. In some industries the number of intellectual property rights a firm requires to produce a new product is so large, and their ownership is so dispersed, that it is quite easy to unintentionally infringe on a patent. In this environment there is, therefore, a hold-up problem: when the manufacturer starts selling its product a patentee might show up threatening to shut production down unless it is paid high royalties.}, |
| − | tags={}, | + | tags={#Core Paper, Private Mechanisms, Cross-licensing, Litigation}, |
| − | filename={[[Galasso | + | filename={[[Galasso (2007) - Broad Cross License Agreements And Persuasive Patent Litigation]].pdf} |
} | } | ||
| Line 227: | Line 263: | ||
discipline={Econ}, | discipline={Econ}, | ||
research_type={Empirical}, | research_type={Empirical}, | ||
| − | industry={}, | + | industry={General}, |
| − | thicket_stance={}, | + | thicket_stance={Anti}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={This paper investigates how patent thickets and the formation of the Court of Appeal for the Federal Circuit affect the duration of patent disputes, and thus the speed of technology diffusion through licensing... There are two main empirical findings. First, patent disputes in U.S. district courts are settled more quickly when infringers require access to fragmented external rights, but this effect is much weaker after the introduction of the CAFC. Second, the introduction of the CAFC is associated with a direct and large reduction on the duration of disputes, which the model attributes to less uncertainty about the outcome if the dispute goes to trial.}, |
| − | thicket_def={}, | + | thicket_def={#A, #B, Diversely-Held, Complementary Inputs, Overlapping Patents.}, |
| − | thicket_def_extract={}, | + | thicket_def_extract={We study how fragmentation of patent rights (‘patent thickets’)... This allows us to summarize the relationship between fragmentation, complementarity and the expected settlement time in the following proposition: H2: Settlement negotiations will be longer for patents that have fewer substitutes (i.e., greater complementarity}, |
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Galasso Schankerman (2010) - Patent Thickets Courts And The Market For Innovation]].pdf} | filename={[[Galasso Schankerman (2010) - Patent Thickets Courts And The Market For Innovation]].pdf} | ||
} | } | ||
| Line 246: | Line 282: | ||
discipline={Law}, | discipline={Law}, | ||
research_type={Discussion}, | research_type={Discussion}, | ||
| − | industry={}, | + | industry={General}, |
| − | thicket_stance={}, | + | thicket_stance={Assumed Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={Inside patent thickets, eBay’s tendency to create either a de facto public domain or patent-collecting organizations with strong market power offers two potential solutions to the “anticommons” problem. However, these solutions are not without their own drawbacks, and it is still unclear whether eBay leads to improved efficiency in the use of innovations in areas of technology covered by patent thickets. Even though eBay mitigates the costs associated with a failure to license, it also exposes the weakness of a patent system un-enforced by automatic injunctions or prone to abuse by patent cartels.}, |
thicket_def={Overlapping Patents, Complementary Inputs, Diversely-Held, Transaction Costs}, | thicket_def={Overlapping Patents, Complementary Inputs, Diversely-Held, Transaction Costs}, | ||
| − | thicket_def_extract={Many areas of technology are subject to numerous overlapping patent rights, or a “patent thicket.”1 A patent thicket exists where there are numerous different firms holding patents that are legally and technologically distinct, but overlap to cover a much smaller number of actual or potential commercial products... Property law and patent law scholars have recently noticed that patent thickets have the potential to trigger a “tragedy of the anticommons,”5 with so many patent holders in a given area that it is too difficult to secure all of the necessary licenses to use the technology.}, | + | thicket_def_extract={#A, #B, Many areas of technology are subject to numerous overlapping patent rights, or a “patent thicket.”1 A patent thicket exists where there are numerous different firms holding patents that are legally and technologically distinct, but overlap to cover a much smaller number of actual or potential commercial products... Property law and patent law scholars have recently noticed that patent thickets have the potential to trigger a “tragedy of the anticommons,”5 with so many patent holders in a given area that it is too difficult to secure all of the necessary licenses to use the technology.}, |
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[George (2006) - What Is Hiding In The Bushes Ebays Effect On Holdout Behavior In Patent Thickets]].pdf} | filename={[[George (2006) - What Is Hiding In The Bushes Ebays Effect On Holdout Behavior In Patent Thickets]].pdf} | ||
} | } | ||
| Line 262: | Line 298: | ||
discipline={Econ}, | discipline={Econ}, | ||
research_type={Empirical}, | research_type={Empirical}, | ||
| − | industry={}, | + | industry={General}, |
| − | thicket_stance={}, | + | thicket_stance={Neutral}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={The empirical and theoretical results of this Essay seriously question the underpinnings of recent proposals advocating various changes in antitrust enforcement and patent law, which are meant to address the purported tragedy of the anti-commons and the misfortunes caused by ever growing patent thickets.}, |
| − | thicket_def={References Shapiro, References Heller/Eisenberg, Cummulative Invention, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up}, | + | thicket_def={#A-T, #B-T, References Shapiro, References Heller/Eisenberg, Cummulative Invention, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up}, |
thicket_def_extract={One of the earliest applications of the cumulative and sequential innovation theory was aimed at biotechnology research... In 2001, Shapiro pronounced the existence of a “patent thicket” in “several key industries”... Nonetheless, Shapiro does not present any evidence on licensing difficulties or holdup within the semiconductor or telecom industries... One of the key distinctions for the anti-commons theory as applied to standard setting lies in the timing of licensing negotiations. For those technologies that are easy to invent around, “the patented technology contributes little if anything to the final product, and any ‘reasonable’ royalty would be modest at best.”38 But Shapiro and others argue that after the technology is included in a standard or after potential licensees have started manufacturing, the patent holder “can credibly seek far greater royalties, very likely backed up with the threat of shutting down the manufacturer…” Shapiro sees little relief for this ex post hold-up aspect of patent thickets short of reforming patent law... Based on patent thicket and anti-commons theory, along with insights from transaction cost theory, Ziedonis predicted that firms would patent more aggressively than expected when the rights to the technology are highly fragmented}, | thicket_def_extract={One of the earliest applications of the cumulative and sequential innovation theory was aimed at biotechnology research... In 2001, Shapiro pronounced the existence of a “patent thicket” in “several key industries”... Nonetheless, Shapiro does not present any evidence on licensing difficulties or holdup within the semiconductor or telecom industries... One of the key distinctions for the anti-commons theory as applied to standard setting lies in the timing of licensing negotiations. For those technologies that are easy to invent around, “the patented technology contributes little if anything to the final product, and any ‘reasonable’ royalty would be modest at best.”38 But Shapiro and others argue that after the technology is included in a standard or after potential licensees have started manufacturing, the patent holder “can credibly seek far greater royalties, very likely backed up with the threat of shutting down the manufacturer…” Shapiro sees little relief for this ex post hold-up aspect of patent thickets short of reforming patent law... Based on patent thicket and anti-commons theory, along with insights from transaction cost theory, Ziedonis predicted that firms would patent more aggressively than expected when the rights to the technology are highly fragmented}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Geradin (2007) - Royalty Stacking In High Tech Industries Separating Myth From Reality]].pdf} | filename={[[Geradin (2007) - Royalty Stacking In High Tech Industries Separating Myth From Reality]].pdf} | ||
} | } | ||
| Line 277: | Line 313: | ||
year={2008}, | year={2008}, | ||
abstract={Royalty stacking, the most recent incarnation of the complements problem identified in the early 1800s by French engineer Augustine Cournot, has received considerable attention. The potential for royalty stacking within standard setting efforts arises from the fact that downstream manufacturing companies can face multiple upstream gatekeepers, each of whom must grant a license to their “essential” patents before the downstream firms can legally commercialize the standard. Some authors have claimed that in high-tech industries—which are frequently characterized by cumulative innovation, dispersed ownership of patents, and cooperative standard setting efforts—the cost of obtaining all necessary licenses is too high, such that innovation has been thwarted and consumers have been harmed. In this paper, we assess the case for royalty stacking within standards and find the evidentiary support weak at best. We note that the relevant question is not whether royalty stacking is possible, as the theoretical arguments behind it have withstood the test of time, but whether it is common enough and costly enough in actuality to warrant policy changes. The available evidence suggests not, implying that any policy changes aimed at solving royalty stacking are likely to cause more (unintended) harm than they cure.}, | abstract={Royalty stacking, the most recent incarnation of the complements problem identified in the early 1800s by French engineer Augustine Cournot, has received considerable attention. The potential for royalty stacking within standard setting efforts arises from the fact that downstream manufacturing companies can face multiple upstream gatekeepers, each of whom must grant a license to their “essential” patents before the downstream firms can legally commercialize the standard. Some authors have claimed that in high-tech industries—which are frequently characterized by cumulative innovation, dispersed ownership of patents, and cooperative standard setting efforts—the cost of obtaining all necessary licenses is too high, such that innovation has been thwarted and consumers have been harmed. In this paper, we assess the case for royalty stacking within standards and find the evidentiary support weak at best. We note that the relevant question is not whether royalty stacking is possible, as the theoretical arguments behind it have withstood the test of time, but whether it is common enough and costly enough in actuality to warrant policy changes. The available evidence suggests not, implying that any policy changes aimed at solving royalty stacking are likely to cause more (unintended) harm than they cure.}, | ||
| − | discipline={Econ | + | discipline={Econ}, |
research_type={Discussion}, | research_type={Discussion}, | ||
| − | industry={}, | + | industry={Semiconductor, Software, Biotech}, |
| − | thicket_stance={}, | + | thicket_stance={Assumed Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={The articles that attached the “anti-commons” label to this “stunting effect” came several years later.}, |
| − | thicket_def={References Shapiro, References Heller/Eisenberg, Complementary Inputs, Diversely-Held, Transaction Costs, Overlapping Patents, Cummulative Invention, Unspecified Blocking Mechanism}, | + | thicket_def={#A, References Shapiro, References Heller/Eisenberg, Complementary Inputs, Diversely-Held, Transaction Costs, Overlapping Patents, Cummulative Invention, Unspecified Blocking Mechanism}, |
thicket_def_extract={Relying on this logic, some authors have claimed that in high-tech industries—which are frequently characterized by cumulative innovation and dispersed ownership of patents—the cost of obtaining all necessary licenses is too high, such that innovation has been thwarted and consumers have been harmed.6... In an article evaluating the National Institute of Health’s (NIH) proposal to patent products resulting from sequencing the human genome, Kiley (1992) argued “[b]ecause every step along the way draws another patent application, the path toward public possession of real benefit is increasingly obscured by dense thickets of intersecting, overlapping, and cross-blocking patents . . . The cumulation of royalty obligations threatens to have [a stunting] effect in biotechnology.”... Shapiro (2001) applies the concern expressed by Kiley over “dense thickets of intersecting, overlapping, and cross-blocking patents” to high technology industries more frequently involved in standard setting.28 In particular, Shapiro argues that “[t]he need to navigate the patent thicket and holdup is especially pronounced in industries such as telecommunications and computing in which formal standard setting is a core part of bringing new technologies to market.”29... Referring to “Cournot’s lessons”, Shapiro presents a number of “unattractive consequences” resulting from “multiple patent burdens.”31 Namely, he argues that a complements problem would not only reduce consumer welfare, it also would lower the profits of patent holders, as compared to a coordinated licensing approach; it can result in market collapse if production is subject to economies of scale; and it “necessarily reduces the return to new product design and development, and thus can easily be a drag on innovation and commercialization of new technologies.”}, | thicket_def_extract={Relying on this logic, some authors have claimed that in high-tech industries—which are frequently characterized by cumulative innovation and dispersed ownership of patents—the cost of obtaining all necessary licenses is too high, such that innovation has been thwarted and consumers have been harmed.6... In an article evaluating the National Institute of Health’s (NIH) proposal to patent products resulting from sequencing the human genome, Kiley (1992) argued “[b]ecause every step along the way draws another patent application, the path toward public possession of real benefit is increasingly obscured by dense thickets of intersecting, overlapping, and cross-blocking patents . . . The cumulation of royalty obligations threatens to have [a stunting] effect in biotechnology.”... Shapiro (2001) applies the concern expressed by Kiley over “dense thickets of intersecting, overlapping, and cross-blocking patents” to high technology industries more frequently involved in standard setting.28 In particular, Shapiro argues that “[t]he need to navigate the patent thicket and holdup is especially pronounced in industries such as telecommunications and computing in which formal standard setting is a core part of bringing new technologies to market.”29... Referring to “Cournot’s lessons”, Shapiro presents a number of “unattractive consequences” resulting from “multiple patent burdens.”31 Namely, he argues that a complements problem would not only reduce consumer welfare, it also would lower the profits of patent holders, as compared to a coordinated licensing approach; it can result in market collapse if production is subject to economies of scale; and it “necessarily reduces the return to new product design and development, and thus can easily be a drag on innovation and commercialization of new technologies.”}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Geradin LayneFarrar PadillaBlanco (2008) - The Complements Problem Within Standard Setting]].pdf} | filename={[[Geradin LayneFarrar PadillaBlanco (2008) - The Complements Problem Within Standard Setting]].pdf} | ||
} | } | ||
| − | @article{ | + | @article{hall2001patent, |
| − | title={ | + | title={The patent paradox revisited: an empirical study of patenting in the US semiconductor industry, 1979-1995}, |
| − | author={Hall, B.H.}, | + | author={Hall, B.H. and Ziedonis, R.H.}, |
| − | journal={ | + | journal={RAND Journal of Economics}, |
| − | + | pages={101--128}, | |
| − | pages={ | + | year={2001}, |
| − | year={ | + | abstract={We examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation. Recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to R&D. Yet the propensity of semiconductor firms to patent has risen dramatically since the mid- 1980s. We explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 U.S. semiconductor firms during 1979-1995. The results suggest that the 1980s strengthening of U.S. patent rights spawned "patent portfolio races" among capital-intensive firms, but it also facilitated entry by specialized design firms.}, |
| − | abstract={ | ||
discipline={Econ}, | discipline={Econ}, | ||
| − | research_type={ | + | research_type={Theory, Empirical}, |
| − | industry={}, | + | industry={Semiconductor}, |
| − | thicket_stance={}, | + | thicket_stance={Assumed Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={If patent rights were strictly awarded to inventors of "nonobvious," "useful," and "novel" inventions, then it should become increasingly difficult to obtain a patent when a thicket of prior art exists, and the number of successful patent applications should fall.}, |
| − | thicket_def={}, | + | thicket_def={#A, #B, Diversely-Held, Overlapping Patents, Cummulative Invention, Unspecified Blocking Mechanism (Not DHCI), Strategic Patenting (Bad)}, |
| − | thicket_def_extract={}, | + | thicket_def_extract={The semiconductor industry also provides an excellent setting within which to examine the effects of stronger patent rights on firms engaged in rapidly advancing, "cumulative" technologies. Much like multimedia or computer firms, semiconductor firms often require access to a "thicket" of intellectual property rights in order to advance the technology or to legally produce or sell their products. Given the rapid pace of technological change in this industry, however, any new product or process is likely to overlap with technologies previously or simultaneously developed by external parties (Grindley and Teece, 1997)... This concern appears especially salient among firms that have made costly and rapidly depreciating investments in facilities that use a "thicket" of innovations developed by many parties. To obtain the rights to infringe patents held by external parties and to improve their leverage in negotiations with other patent owners, these firms amass larger patent portfolios of their own with which to trade... If patent rights were strictly awarded to inventors of "nonobvious," "useful," and "novel" inventions, then it should become increasingly difficult to obtain a patent when a thicket of prior art exists, and the number of successful patent applications should fall.}, |
| − | tags={}, | + | tags={#Core Paper}, |
| − | filename={[[Hall ( | + | filename={[[Hall Ziedonis (2001) - The Patent Paradox Revisited]].pdf} |
} | } | ||
| Line 314: | Line 349: | ||
year={2012}, | year={2012}, | ||
abstract={}, | abstract={}, | ||
| − | discipline={ | + | discipline={Policy Report}, |
research_type={Empirical}, | research_type={Empirical}, | ||
| − | industry={}, | + | industry={General}, |
| − | thicket_stance={}, | + | thicket_stance={Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={We find overwhelming evidence in the literature that patent thickets arise in specific technology areas.}, |
| − | thicket_def={Broad Patents, Overlapping Patents, Cummulative Invention, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism}, | + | thicket_def={#A, #B, Broad Patents, Overlapping Patents, Cummulative Invention, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism}, |
thicket_def_extract={A patent thicket is “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology” (Shapiro, 2000). Patent thickets consist of patents that protect components of a modular and complex technology. Here modular means that different sets of components can be assembled to yield a variety of technological products. Complex means that products consist of tens or hundreds of such modular components. Each component may end up being used in several products. Often there are partial or complete overlaps in the functionality of components and then the patents protecting the components may also overlap. If overlapping patents belong to different firms, then a patent thicket exists. Although technology areas with large number of patents often lead to patent thickets, this is not necessarily the case. In principle, an active technology area could have a large number of patents, each clearly delineating the invention concerned and none with overlapping claims or claims with uncertain breadth or scope. Thus it is important not to use numbers of patents as an indicator of patent thickets. Nevertheless, it is undoubtedly the case that one of implications of the presence of patent thickets is active patenting in the sector, so the two phenomena are correlated. Later in this report, we propose a measure of thickets in a technology area that incorporates an indicator of complexity and the possibility of overlapping claims, and controls for the overall level of patenting in the area.}, | thicket_def_extract={A patent thicket is “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology” (Shapiro, 2000). Patent thickets consist of patents that protect components of a modular and complex technology. Here modular means that different sets of components can be assembled to yield a variety of technological products. Complex means that products consist of tens or hundreds of such modular components. Each component may end up being used in several products. Often there are partial or complete overlaps in the functionality of components and then the patents protecting the components may also overlap. If overlapping patents belong to different firms, then a patent thicket exists. Although technology areas with large number of patents often lead to patent thickets, this is not necessarily the case. In principle, an active technology area could have a large number of patents, each clearly delineating the invention concerned and none with overlapping claims or claims with uncertain breadth or scope. Thus it is important not to use numbers of patents as an indicator of patent thickets. Nevertheless, it is undoubtedly the case that one of implications of the presence of patent thickets is active patenting in the sector, so the two phenomena are correlated. Later in this report, we propose a measure of thickets in a technology area that incorporates an indicator of complexity and the possibility of overlapping claims, and controls for the overall level of patenting in the area.}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Hall (2012) - A Study Of Patent Thickets]].pdf} | filename={[[Hall (2012) - A Study Of Patent Thickets]].pdf} | ||
} | } | ||
| − | + | @article{hall2007empirical, | |
| − | + | title={An empirical analysis of patent litigation in the semiconductor industry}, | |
| − | + | author={Hall, Bronwyn H and Ziedonis, Rosemarie}, | |
| − | + | journal={University of California at Berkeley working paper}, | |
| − | + | year={2007}, | |
| − | + | publisher={Citeseer}, | |
| − | + | abstract={Semiconductor firms sell products that embed hundreds if not thousands of patented inventions, elevating concerns about patent-related hold-up in this sector. This paper examines the incidence and nature of patent lawsuits involving 136 dedicated U.S. semiconductor firms between 1973 and 2001. By supplementing patent litigation data with information drawn from archival sources, we estimate the probability that firms will be involved in patent lawsuits, either as enforcers of exclusionary rights or as targets of litigation filed by other patent owners. We further distinguish between disputes that involve product-market rivals and those that do not. Overall, we find little evidence that semiconductor firms have adopted a more aggressive stance towards patent enforcement since the 1970s, despite the effective strengthening of U.S. patent rights in the 1980s and widespread entry by small firms. In fact, their litigation rate as enforcers of patents remains relatively stable over the past two decades once we control for factors such as the number of patents they own and changes in R&D spending. In striking contrast, we find an escalation in their baseline risk as targets of litigation brought by outside patent owners.}, | |
| − | + | discipline={Econ}, | |
| − | + | research_type={Empirical, Discussion}, | |
| − | + | industry={Semiconductor}, | |
| − | + | thicket_stance={Assumed Pro}, | |
| − | + | thicket_stance_extract={The conclusion is that semiconductor firms behave like other firms in thickets industries with respect to their own litigation, but compared to other thickets industries, as targets their size and their large sunk technology costs make them look more like firms in chemicals.}, | |
| − | + | thicket_def={#A, Complementary Inputs, Diversely-Held, Hold-up}, | |
| − | + | thicket_def_extract={If there is an “innovation tax” arising from patents, it is expected to be especially salient in sectors where products are complex and combine many patentable technologies that may be owned by a number of different parties. As suggested by a number of researchers (e.g., see Grindley and Teece 1997) and as shown by Arora et al. (2003), Information and Communication Technology (ICT) sectors, including semiconductors, are likely to fall in this class of sectors. Such firms typically require access to a “thicket” of external intellectual property to advance technology or to legally manufacture and sell products, elevating concerns about patent-related hold-up problems.}, | |
| − | + | tags={}, | |
| − | + | filename={Hall Ziedonis (2007) - An Empirical Analysis Of Patent Litigation In The Semiconductor Industry.pdf} | |
| − | + | } | |
@article{hargreaves2011digital, | @article{hargreaves2011digital, | ||
| Line 347: | Line 382: | ||
author={Hargreaves, I.}, | author={Hargreaves, I.}, | ||
year={2011}, | year={2011}, | ||
| − | abstract={}, | + | abstract={Intellectual Property is important to growth... In advanced economies like the UK’s, innovation is crucial to competitive edge. That makes Intellectual Property (IP) policy an increasingly important tool for stimulating economic growth. Every year in the last decade, investment by UK business in intangible assets has outstripped investment in tangible assets: by £137 billion to £104 billion in 2008. Global trade in IP licences alone is worth more than £600 billion a year: five per cent of world trade and rising. Small and young innovative firms are of crucial importance in terms of growth and jobs but proliferating use of IP rights can push up IP transaction costs and block these new players from entering markets. The IP framework is falling behind and must adapt... IP law must adapt to change. Digital communications technology involves routine copying of text, images and data, meaning that copyright law has started to act as a regulatory barrier to the creation of certain kinds of new, internet based businesses. With two thirds of the world’s population yet to achieve direct connection to the internet, this digital revolution has by no means run its course (Chapter 1). The Prime Minister asked the Review to consider whether our IP framework needs to adapt in the interests of encouraging innovation and growth. The Review’s conclusion is that such adaptation is required. The UK’s current IP system is falling behind what is needed, especially in the area of copyright.}, |
| − | discipline={Policy Report | + | discipline={Policy Report}, |
research_type={Discussion}, | research_type={Discussion}, | ||
| − | industry={}, | + | industry={General}, |
| − | thicket_stance={}, | + | thicket_stance={Assumed Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={..in this review: from the single European patent and easier copyright licensing to a better rights framework for design and steps to control patent thickets. Research undertaken by the Review also confirms that SMEs are not sufficiently well served by those providing advice and information on IPRs.}, |
| − | thicket_def={}, | + | thicket_def={#B-ST, References Shapiro, Overlapping Patents, Cummulative Invention, Diversely-Held}, |
| − | thicket_def_extract={}, | + | thicket_def_extract={This finding may be due to the existence of patent thickets – meaning “an overlapping set of patent rights” which require innovators to reach licensing deals for multiple patents from multiple sources.12 These thickets appear to enable patent holders to exclude new and innovative firms from entering the market, thereby inhibiting growth... is causing regulatory blockage in the form of “thickets” of pre-existing patents and pending patents which impede genuine innovators wishing to enter markets... A particular danger from increasing numbers of patents is the development of “thickets” of patents with overlapping claims. The result of these is that businesses working at the leading edge of a particular technology may find it difficult or even impossible to know with whom they are in conflict, or whom they should approach for a licence.}, |
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Hargreaves (2011) - Digital Opportunity]].pdf} | filename={[[Hargreaves (2011) - Digital Opportunity]].pdf} | ||
| + | } | ||
| + | |||
| + | @article{harhoff2012conflict, | ||
| + | title={Conflict Resolution, Public Goods and Patent Thickets}, | ||
| + | author={Harhoff, D. and Von Graevenitz, G. and Wagner, S.}, | ||
| + | journal={Public Goods and Patent Thickets (April 15, 2012)}, | ||
| + | year={2012}, | ||
| + | abstract={Litigation and post-grant validity challenges at patent offices provide an important mechanism for correcting erroneous patent grants. However, such challenges will only be initiated if the (expected) private gains from challenging a granted patent right exceed the respective costs. Two important aspects may influence the likelihood of challenges. First, there is a public goods problem: firms may refrain from challenges if they anticipate that others will also benefit from the revocation of a weak patent. Second, as more firms are caught up in patent thickets, challenges to weak patents will become too costly as they invite counter-challenges. We use data on opposition proceedings initiated against patents granted at the European Patent Office (EPO) to study the importance of these mechanisms. This paper identifies a significant increase in the incidence of opposition in technical fields characterized by high concentration of patent ownership. Additionally, in fields with a large number of mutually blocking patents, the incidence of opposition is sharply reduced, particularly amongst those firms that are caught up in and driving the growth of patent thickets. Thus, while post-grant reviews may help to resolve problems in some areas, they are less suited to deal with patent thickets and contexts with dispersed patent ownership. We discuss the implications of these results for efforts to deal with patent thickets and weak patents.}, | ||
| + | discipline={Econ}, | ||
| + | research_type={Empirical}, | ||
| + | industry={General}, | ||
| + | thicket_stance={Assumed Pro}, | ||
| + | thicket_stance_extract={Additionally, in fields with a large number of mutually blocking patents, the incidence of opposition is sharply reduced, particularly amongst those firms that are caught up in and driving the growth of patent thickets. Thus, while post-grant reviews may help to resolve problems in some areas, they are less suited to deal with patent thickets and contexts with dispersed patent ownership.}, | ||
| + | thicket_def={#B, References Shapiro, Overlapping Patents, Cummulative Invention, Unspecified Blocking Mechanism (Not DHCI), Hold-up}, | ||
| + | thicket_def_extract={Formal models of patenting in patent thickets do not attempt to span both complex and discrete technologies as we do here... Complexity increases with the number of facets. With higher complexity it is increasingly probable that ownership of patents in a technological opportunity becomes dispersed. We assume that the value of owning patents 3 in technological opportunities with more than one facet depends on the share of patents in each technological opportunity that firms own. This captures the interdependence of patents in complex technologies and the possibility for hold-up within them.... Due to the complexity of the technology hold-up may arise: in the case of LASIK there has was a string of court cases between VISX Inc. and Nidek Inc. after 1998 regarding infringement of VISX patents on LASIK... The literature on patent thickets shows that several institutional arrangements allow firms to disentangle overlapping property rights... This is attributed to firms’ efforts to reduce potential hold-up by opportunistic patentees owning critical or blocking patent rights – a situation which is associated with the existence of patent thickets.}, | ||
| + | tags={#Core Paper}, | ||
| + | filename={[[Harhoff VonGraevenitz Wagner (2012) - Conflict Resolution Public Goods And Patent Thickets]].pdf} | ||
} | } | ||
| Line 368: | Line 420: | ||
discipline={Econ}, | discipline={Econ}, | ||
research_type={Empirical}, | research_type={Empirical}, | ||
| − | industry={}, | + | industry={General}, |
| − | thicket_stance={}, | + | thicket_stance={Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={The results show that patent thickets exist in 9 out of 30 technology areas. We find that decreased technological opportunities are a surprisingly strong driver of patent thicket growth.}, |
| − | thicket_def={Dubious Patents, Overlapping Patents, Cummulative Invention, Transaction Costs, Always Hinders Innovation, Strategic Patenting (Bad)}, | + | thicket_def={#A-ST, #B-ST, #C1, #D, References Shapiro, Complementary Inputs, Diversely-Held, Dubious Patents, Overlapping Patents, Cummulative Invention, Transaction Costs, Always Hinders Innovation, Strategic Patenting (Bad)}, |
| − | thicket_def_extract={This patenting boom is leading to problems of patent office backlogs and the emergence of so called “patent thickets”, which obstruct entry to some markets and so impede innovation. The structure of patent renewal fees might be adjusted to encourage patentees to assess more carefully the value of maintaining lower value patents, so reducing the density of patent thickets... This finding may be due to the existence of patent thickets – meaning “an overlapping set of patent rights” which require innovators to reach licensing deals for multiple patents from multiple sources.12 These thickets appear to enable patent holders to exclude new and innovative firms from entering the market, thereby inhibiting growth... These delays have led to backlogs at patent offices. Meanwhile, in some business sectors patent proliferation is causing regulatory blockage in the form of “thickets” of pre-existing patents and pending patents which impede genuine innovators wishing to enter markets... A particular danger from increasing numbers of patents is the development of “thickets” of patents with overlapping claims. The result of these is that businesses working at the leading edge of a particular technology may find it difficult or even impossible to know with whom they are in conflict, or whom they should approach for a licence... As well as added transaction costs, patent thickets encourage strategic or defensive patenting behaviour,5 particularly where there is fragmentation of IPRs into the hands of multiple owners.6 Strategic patenting behaviour occurs when firms build portfolios of patents for defensive rather than innovative purposes... Thus, although these market solutions offer ways around the thicketing problem, they bring their own difficulties, particularly for the very firms most crucial to innovation. It follows that standards setting and cross licensing pools are valuable, but not a complete answer to the growing problem of thickets and the risk of “gridlock.”... This would encourage the surrender of less valuable patents, reducing the density of thickets in a way consistent with achieving the maximum net economic benefit.}, | + | thicket_def_extract={...Complexity of a technology implies that patents are natural complements, and therefore hold-up arises easily if patent ownership is dispersed... This patenting boom is leading to problems of patent office backlogs and the emergence of so called “patent thickets”, which obstruct entry to some markets and so impede innovation. The structure of patent renewal fees might be adjusted to encourage patentees to assess more carefully the value of maintaining lower value patents, so reducing the density of patent thickets... This finding may be due to the existence of patent thickets – meaning “an overlapping set of patent rights” which require innovators to reach licensing deals for multiple patents from multiple sources.12 These thickets appear to enable patent holders to exclude new and innovative firms from entering the market, thereby inhibiting growth... These delays have led to backlogs at patent offices. Meanwhile, in some business sectors patent proliferation is causing regulatory blockage in the form of “thickets” of pre-existing patents and pending patents which impede genuine innovators wishing to enter markets... A particular danger from increasing numbers of patents is the development of “thickets” of patents with overlapping claims. The result of these is that businesses working at the leading edge of a particular technology may find it difficult or even impossible to know with whom they are in conflict, or whom they should approach for a licence... As well as added transaction costs, patent thickets encourage strategic or defensive patenting behaviour,5 particularly where there is fragmentation of IPRs into the hands of multiple owners.6 Strategic patenting behaviour occurs when firms build portfolios of patents for defensive rather than innovative purposes... Thus, although these market solutions offer ways around the thicketing problem, they bring their own difficulties, particularly for the very firms most crucial to innovation. It follows that standards setting and cross licensing pools are valuable, but not a complete answer to the growing problem of thickets and the risk of “gridlock.”... This would encourage the surrender of less valuable patents, reducing the density of thickets in a way consistent with achieving the maximum net economic benefit.}, |
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Harhoff (2008) - Incidence And Growth Of Patent Thickets]].pdf} | filename={[[Harhoff (2008) - Incidence And Growth Of Patent Thickets]].pdf} | ||
} | } | ||
| − | @article{ | + | @article{harhoff2007strategic, |
| − | title={ | + | title={The strategic use of patents and its implications for enterprise and competition policies}, |
| − | author={Harhoff, | + | author={Harhoff, Dietmar and Hall, Bronwyn H and von Graevenitz, Georg and Hoisl, Karin and Wagner, Stefan and Gambardella, Alfonso and Giuri, Paola}, |
| − | journal={ | + | journal={Report commissioned by European Commission}, |
| − | year={ | + | year={2007}, |
| − | abstract={ | + | abstract={This report was commissioned as a study into the strategic use of patents. In the course of its case investigations and legislative reviews the European Commission became aware of changes in the use of intellectual property, in particular the use of patents. It was noted that firms’ uses of intellectual property are becoming increasingly strategic. This raised concerns about the implications of firms’ patenting behaviour for enterprise and competition policy. The following report contains a comprehensive review of patenting behaviour, the extent to which patenting i s becoming more strategic and the implications this has for c ompetition and enterprise policies.}, |
| − | discipline={ | + | discipline={Policy Report}, |
| − | research_type={ | + | research_type={Theory, Discussion}, |
| − | industry={}, | + | industry={General}, |
| − | thicket_stance={}, | + | thicket_stance={Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={In general the complementarity of patents i n complex technologies gives rise to greater frequency of interaction between firms. This happens when firms disentangle the patent thicket and insure themselves against hold-up through licensing or similar forms of cooperation and coordination.}, |
| − | thicket_def={References Shapiro, | + | thicket_def={#A-T, References Shapiro, References Heller/Eisenberg, Complementary Inputs, Diversely-Held, Transaction Costs}, |
| − | thicket_def_extract={ | + | thicket_def_extract={In the field of biomedical research an early paper by Heller and Eisenberg (1998) raised serious questions regarding the effects of patenting on research productivity in this field, especially at the level of basic scientific research. they argue that patent thickets in biomedical research would make it difficult or impossible for researchers to access basic research tools. By implication research progress in these industries would be stifled. More recent work by Walsh, Arora and Cohen (2002) and Walsh, Cho and Cohen (2005) does not show that these concerns are generally valid. In the field of nanotechnology Lemley (2005) has documented that firms and universi ties are patenting at an unprecedented pace for such a new technology. He points out that this is the first new technology to emerge in which basic scientific building blocks are being patented... What unifies all of this work is its focus on patenting in technologies in which a product is based on a large number of patents, i.e., industries in which products are complex. These patents are valuable only as a set of complementary patent rights. Thus, assumption (iv) 37 of the traditional view of patents is violated. Shapiro (2001) argues that firms in industries based on such complex technologies face a growing “patent thicket”: a dense web of overlapping patents in which a firm is often faced by rivals that hold patents which may block the use of its own patents... In such cases the various patents embodied in the product become “technological complements”. Technological complementarity is one cause for overlapping patents and for the existence of blocking patents. Thus it is one precondition for the emergence of patent thickets and for the amassing of patent portfolios... It may be that the firms involved are attempting to reduce transactions costs that arise within a patent thicket.}, |
| − | tags={}, | + | tags={#Core Paper, Complements, Substitutes, Fences, Strategic Patenting}, |
| − | filename={[[Harhoff | + | filename={[[Harhoff (2007) - The Strategic Use Of Patents And Its Implications For Enterprise And Competition Policies]].pdf} |
} | } | ||
| Line 405: | Line 457: | ||
discipline={Econ}, | discipline={Econ}, | ||
research_type={Empirical}, | research_type={Empirical}, | ||
| − | industry={}, | + | industry={General}, |
| − | thicket_stance={}, | + | thicket_stance={Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={A high proportion of backward self-cites is another potential correlate of patenting strategies that accumulate “thickets” of patents that overlap and cite one another. We found that patents owned by Compustat firms issuing from post-1995 CAPs contained a significantly higher proportion of backward self-citations than any other group of patents, whereas CAPs prior to 1995 cited their own patents less frequently than patents issuing from any other type of continuation. This provides additional evidence on the increased use of CAPs in post-1995 strategies that involve building thickets of patents.}, |
| − | thicket_def={References Shapiro, Dubious Patents, Overlapping Patents, Cummulative Invention, Strategic Patenting (Bad), Hold-up}, | + | thicket_def={#C, References Shapiro, Dubious Patents, Overlapping Patents, Cummulative Invention, Strategic Patenting (Bad), Hold-up}, |
thicket_def_extract={These lower-quality patents can be valuable to patentholders seeking to accumulate a thicket of patents for “defensive” purposes and/or to improve their bargaining position in patent cross-licensing negotiations (Shapiro 2001). Additionally, according to Lemley and Moore (2004), inventors may use the continuations procedure to increase uncertainty for rivals’ research and development (R&D) investment decisions, or to acquire so-called “submarine patents"... A patenting strategy that is consistent with the use of continuations to acquire a large number of less significant patents has been analyzed by Hall and Ziedonis (2001) in the semiconductor industry. For capital-intensive manufacturing firms, whose multibillion-dollar production facilities are at risk of shutdowns from patent-infringement injunctions, large patent portfolios can be useful in cross-licensing negotiations that reduce the risk of patent litigation.}, | thicket_def_extract={These lower-quality patents can be valuable to patentholders seeking to accumulate a thicket of patents for “defensive” purposes and/or to improve their bargaining position in patent cross-licensing negotiations (Shapiro 2001). Additionally, according to Lemley and Moore (2004), inventors may use the continuations procedure to increase uncertainty for rivals’ research and development (R&D) investment decisions, or to acquire so-called “submarine patents"... A patenting strategy that is consistent with the use of continuations to acquire a large number of less significant patents has been analyzed by Hall and Ziedonis (2001) in the semiconductor industry. For capital-intensive manufacturing firms, whose multibillion-dollar production facilities are at risk of shutdowns from patent-infringement injunctions, large patent portfolios can be useful in cross-licensing negotiations that reduce the risk of patent litigation.}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Hegde Mowery Graham (2009) - Pioneering Inventors Or Thicket Builders]].pdf} | filename={[[Hegde Mowery Graham (2009) - Pioneering Inventors Or Thicket Builders]].pdf} | ||
} | } | ||
| Line 425: | Line 477: | ||
discipline={Law}, | discipline={Law}, | ||
research_type={Theory}, | research_type={Theory}, | ||
| − | industry={ | + | industry={Biotech, Pharma}, |
| − | thicket_stance={}, | + | thicket_stance={Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={The result has been a spiral of overlapping patent claims in the hands of different owners, reaching ever further upstream in the course of biomedical research.}, |
| − | thicket_def={Overlapping Patents, Cummulative Invention, Complementary Inputs, Diversely-Held, Transaction Costs}, | + | thicket_def={#A, #B, Overlapping Patents, Cummulative Invention, Complementary Inputs, Diversely-Held, Transaction Costs}, |
thicket_def_extract={Building on Heller’s theory of anticommons property (3), this article identifies an unintended and paradoxical consequence of biomedical privatization: A proliferation of intellectual property rights upstream may be stifling life-saving innovations further downstream in the course of research and product development... Anticommons property can best be understood as the mirror image of commons property (3, 8). A resource is prone to overuse in a tragedy of the commons when too many owners each have a privilege to use a given resource and no one has a right to exclude another (9). By contrast, a resource is prone to underuse in a “tragedy of the anticommons” when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. In theory, in a world of costless transactions, people could always avoid commons or anticommons tragedies by trading their rights (10). In practice, however, avoiding tragedy requires overcoming transaction costs, strategic behaviors, and cognitive biases of participants (11), with success more likely within close-knit communities than among hostile strangers (12– 14).... The tragedy of the anticommons refers to the more complex obstacles that arise when a user needs access to multiple patented inputs to create a single useful product. Each upstream patent allows its owner to set up another tollbooth on the road to product development, adding to the cost and slowing the pace of downstream biomedical innovation. Current examples in biomedical research demonstrate two mechanisms by which a government might inadvertently create an anticommons: either by creating too many concurrent fragments of intellectual property rights in potential future products or by permitting too many upstream patent owners to stack licenses on top of the future discoveries of downstream users.... Stacking licenses. The use of reachthrough license agreements (RTLAs) on patented research tools illustrates another path by which an anticommons may emerge. As we use the term, an RTLA gives the owner of a patented invention, used in upstream stages of research, rights in subsequent downstream discoveries. Such rights may take the form of a royalty on sales that result from use of the upstream research tool, an exclusive or nonexclusive license on future discoveries, or an option to acquire such a license... Transaction costs of bundling rights. High transaction costs may be an enduring impediment to efficient bundling of intellectual property rights in biomedical research.}, | thicket_def_extract={Building on Heller’s theory of anticommons property (3), this article identifies an unintended and paradoxical consequence of biomedical privatization: A proliferation of intellectual property rights upstream may be stifling life-saving innovations further downstream in the course of research and product development... Anticommons property can best be understood as the mirror image of commons property (3, 8). A resource is prone to overuse in a tragedy of the commons when too many owners each have a privilege to use a given resource and no one has a right to exclude another (9). By contrast, a resource is prone to underuse in a “tragedy of the anticommons” when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. In theory, in a world of costless transactions, people could always avoid commons or anticommons tragedies by trading their rights (10). In practice, however, avoiding tragedy requires overcoming transaction costs, strategic behaviors, and cognitive biases of participants (11), with success more likely within close-knit communities than among hostile strangers (12– 14).... The tragedy of the anticommons refers to the more complex obstacles that arise when a user needs access to multiple patented inputs to create a single useful product. Each upstream patent allows its owner to set up another tollbooth on the road to product development, adding to the cost and slowing the pace of downstream biomedical innovation. Current examples in biomedical research demonstrate two mechanisms by which a government might inadvertently create an anticommons: either by creating too many concurrent fragments of intellectual property rights in potential future products or by permitting too many upstream patent owners to stack licenses on top of the future discoveries of downstream users.... Stacking licenses. The use of reachthrough license agreements (RTLAs) on patented research tools illustrates another path by which an anticommons may emerge. As we use the term, an RTLA gives the owner of a patented invention, used in upstream stages of research, rights in subsequent downstream discoveries. Such rights may take the form of a royalty on sales that result from use of the upstream research tool, an exclusive or nonexclusive license on future discoveries, or an option to acquire such a license... Transaction costs of bundling rights. High transaction costs may be an enduring impediment to efficient bundling of intellectual property rights in biomedical research.}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Heller Eisenberg (1998) - Can Patents Deter Innovation The Anticommons In Biomedical Research]].pdf} | filename={[[Heller Eisenberg (1998) - Can Patents Deter Innovation The Anticommons In Biomedical Research]].pdf} | ||
| + | } | ||
| + | |||
| + | @article{heller1997tragedy, | ||
| + | title={Tragedy of the Anticommons: Property in the Transition from Marx to Markets, The}, | ||
| + | author={Heller, Michael A}, | ||
| + | journal={HARV. l. Rev.}, | ||
| + | volume={111}, | ||
| + | pages={621}, | ||
| + | year={1997}, | ||
| + | abstract={Why are many storefronts in Moscow empty while street kiosks in front are full of goods? This article develops a theory of anitcommons property to help explain the puzzle of empty storefronts and full kiosks. Anticommons property can be understood as the mirror image of commons property. By definition, in a commons, multiple owners are each endowed with the privilege to use a given resource, and no one has the right to exclude another. When too many owners have such privileges of use, the resource is prone to overuse – a tragedy of the commons. In an anitcommons, by my definition, multiple owners are each endowed with the right to exclude others from a scarce resource, and no one has an effective privilege of use. When there are too many owners holding rights of exclusion, the resource is prone to underuse – a tragedy of the anitcommons. Anticommons property may appear whenever new property rights are being defined. For example in Moscow, multiple owners have been endowed initially with competing rights in each storefront, so no owner holds a useable bundle of rights and the store remains empty. Once an anticommons has emerged, collecting rights into private property bundles can be brutal and slow. This article explores the dynamics of anitcommons property in transition economies, formalizes the empirical material in a property theory framework, and then shows how the idea of anticommons property can be a useful new tool for understanding a range of property puzzles. The difficulties of overcoming a tragedy of the anticommons suggest that property theorists might pay more attention to the content of the property bundles, rather than focusing just on the clarify rights. }, | ||
| + | discipline={Law}, | ||
| + | research_type={Theory}, | ||
| + | industry={General}, | ||
| + | thicket_stance={Pro}, | ||
| + | thicket_stance_extract={Governments may create anticommons property in developed market economies, as well as in transition countries. In the United States, vivid examples appear at the frontiers of Native American law and intellectual property protection.20 Whether anticommons tragedy emerges in a developed or transition economy, and whether it lasts for a short or long period, societies can avoid its social costs by creating more coherent initial endowments. The difficulties of overcoming a tragedy of the anticommons suggest that property theorists and policymakers should pay more attention to the content of property bundles,2' rather than focusing just on the clarity of rights... Within United States law, powerful applications of the anticommons idea appear often in the intellectual property and the land use areas. In a forthcoming article, Rebecca Eisenberg and I use an anticommons analysis to show how increased patentability of basic biomedical research may lead to the development of fewer useful pharmaceutical products.}, | ||
| + | thicket_def={#A, #B}, | ||
| + | thicket_def_extract={In an anticommons, by my definition, multiple owners are each endowed with the right to exclude others from a scarce resource, and no one has an effective privilege of use. 11 When there are too many owners holding rights of exclusion, the resource is prone to underuse - a tragedy of the anticommons.12 Legal and economic scholars have mostly overlooked this tragedy, but...}, | ||
| + | tags={#Core Paper, Seminal Theory!}, | ||
| + | filename={[[Heller (1998) - The Tragedy Of The Anticommons]].pdf} | ||
} | } | ||
| Line 443: | Line 514: | ||
year={2009}, | year={2009}, | ||
abstract={Knowledge-based firms seeking competitive advantage often draw on the public knowledge stream (ideas embedded in public commons institutions) as the foundation for private knowledge (ideas firms protect through private intellectual property [IP] institutions). However, understanding of the converse relationship—the impact of private knowledge strategies on public knowledge production—is limited. We examine this question in human genetics, where policy makers debate expanding IP ownership over the human genome. Our difference-in-differences estimates show that gene patents decrease public genetic knowledge, with broader patent scope, private sector ownership, patent thickets, fragmented patent ownership, and a gene’s commercial relevance exacerbating their effect.}, | abstract={Knowledge-based firms seeking competitive advantage often draw on the public knowledge stream (ideas embedded in public commons institutions) as the foundation for private knowledge (ideas firms protect through private intellectual property [IP] institutions). However, understanding of the converse relationship—the impact of private knowledge strategies on public knowledge production—is limited. We examine this question in human genetics, where policy makers debate expanding IP ownership over the human genome. Our difference-in-differences estimates show that gene patents decrease public genetic knowledge, with broader patent scope, private sector ownership, patent thickets, fragmented patent ownership, and a gene’s commercial relevance exacerbating their effect.}, | ||
| − | discipline={Mgmt | + | discipline={Mgmt}, |
research_type={Empirical}, | research_type={Empirical}, | ||
| − | industry={}, | + | industry={Genetics}, |
| − | thicket_stance={}, | + | thicket_stance={Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={The third element of our results highlights the ways in which the patent landscape contours the long-run production of genetic knowledge. Scholars have debated whether and to what extent patent thickets and patent fragmentation impede follow- on innovation. Ziedonis (2004) found evidence that complex patent thickets limit future patent contributions to private knowledge (in the semiconductor industry), yet no empirical evidence has spoken directly to the relationship between the patent landscape and public knowledge production. We took advantage of the specificity of gene sequences to develop the first large-scale empirical evidence of this type. We show that although the relationship between patent thicket size and knowledge production is noisy (the results were directionally as we predicted), increasing ownership fragmentation contributes significantly to the negative impact of patent grant. This finding suggests that even though ownership concentration is an important source of competitive advantage for owners of a patent portfolio, fragmentation is more problematic for follow-on contributors to public knowledge, presumably because of the complexities and costs of navigating and negotiating with many patent assignees in a fragmented patent thicket.}, |
| − | thicket_def={Quotes Shapiro, References Shapiro, References Heller/Eisenberg, Overlapping Patents, Diversely-Held, Complementary Inputs, Transaction Costs, Cummulative Invention}, | + | thicket_def={#A, #B, Quotes Shapiro, References Shapiro, References Heller/Eisenberg, Overlapping Patents, Diversely-Held, Complementary Inputs, Transaction Costs, Cummulative Invention}, |
thicket_def_extract={In testing whether this effect shapes contributions to public knowledge, we relied on two characteristics that define the patent landscape: “thickets” and “fragmentation.” A patent thicket is “an overlapping set of patent rights requiring those seeking to commercialize new technology to obtain licenses from multiple patentees” (Shapiro 2001:1). We measured thickets as the number of patents claiming the same set of (gene) knowledge inputs.... Although patent thickets may be salient to follow- on researchers, the fragmentation of these multiple competing patent rights across many owners is potentially more problematic. Heller and Eisenberg outlined the following rationale... }, | thicket_def_extract={In testing whether this effect shapes contributions to public knowledge, we relied on two characteristics that define the patent landscape: “thickets” and “fragmentation.” A patent thicket is “an overlapping set of patent rights requiring those seeking to commercialize new technology to obtain licenses from multiple patentees” (Shapiro 2001:1). We measured thickets as the number of patents claiming the same set of (gene) knowledge inputs.... Although patent thickets may be salient to follow- on researchers, the fragmentation of these multiple competing patent rights across many owners is potentially more problematic. Heller and Eisenberg outlined the following rationale... }, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Huang Murray (2009) - Does Patent Strategy Shape The Long Run Supply Of Public Knowledge]].pdf} | filename={[[Huang Murray (2009) - Does Patent Strategy Shape The Long Run Supply Of Public Knowledge]].pdf} | ||
| + | } | ||
| + | |||
| + | @article{kiley1992patents, | ||
| + | title={Patents on random complementary DNA fragments?}, | ||
| + | author={Kiley, Thomas D}, | ||
| + | journal={Science}, | ||
| + | volume={257}, | ||
| + | number={5072}, | ||
| + | pages={915--918}, | ||
| + | year={1992}, | ||
| + | publisher={American Association for the Advancement of Science}, | ||
| + | abstract={The proposal by the National Institutes of Health (NIH) to patent products resulting merely from sequencing the human genome is a mistake: at worst, it is wrong in patent law; at best, it relies on deficiencies in law concerning what is "useful" as a requirement for patents. The proposal is symptomatic of a problem besieging biotechnology-attempts to control the raw material of scientific experimentation before research has determined the practical value of such material-that needs curing on many fronts. Corrective measures are proposed for adoption by the Executive branch, the Congress, and the courts.}, | ||
| + | discipline={Law}, | ||
| + | research_type={Discussion}, | ||
| + | industry={Genetics}, | ||
| + | thicket_stance={Pro}, | ||
| + | thicket_stance_extract={Because every step along the way draws another patent application, the path towardp ublicp ossessiono f realb enefit is increasinglyo bscuredb y dense thicketso f intersecting, overlapping, and cross-blocking patents.}, | ||
| + | thicket_def={#B, #C1, Dubious Patents, Overlapping Patents, Cummulative Invention, Unspecified Blocking Mechanism}, | ||
| + | thicket_def_extract={Today, patents are avidly pursued all along the lengthy road from the most basic science throught o the marketplacef or pharmaceuticals. Because every step along the way draws another patent application, the path towardp ublicp ossessiono f realb enefit is increasinglyo bscuredb y dense thicketso f intersecting, overlapping, and cross-blocking patents. Those operating at the beginnings of the road are most insistent on their right to nail down leverage that will remain formidabled espitem arketplacer ejectiono f the uses to which they say their inventions may be put. The frank aim of these early stagew orkersis to control ultimatea pplications discovered by others. The system is abused if those who would benefit in this way from the later labors of others can posit patents on the most strained utilities imaginable. Typical is the suggestion by NIH that organ differentiation( 18) is sufficient utility for a patent reaching to dominate the later discovery by others of a life-saving application for a cDNA!}, | ||
| + | tags={#Core Paper, First Thicket!}, | ||
| + | filename={Kiley (1992) - Patents On Random Complementary Dna Fragments.pdf} | ||
| + | } | ||
| + | |||
| + | @book{lessig2001future, | ||
| + | title={The future of ideas: The fate of the commons in a connected world}, | ||
| + | author={Lessig, Lawrence}, | ||
| + | year={2001}, | ||
| + | publisher={Vintage}, | ||
| + | abstract={}, | ||
| + | discipline={Law}, | ||
| + | research_type={Discussion}, | ||
| + | industry={General}, | ||
| + | thicket_stance={Pro}, | ||
| + | thicket_stance_extract={The complexity in these rights to exclude creates this anticommons problem. And the more severe the problem, the more it will stifle new innovation.}, | ||
| + | thicket_def={#A, #B, References Shapiro, References Heller/Eisenberg, Overlapping Patents, Cummulative Invention, Complementary Inputs, Diversely-Held}, | ||
| + | thicket_def_extract={...this story about the potential danger of patents in a field where innovation is sequential and complementary (where one builds on another, and the second complements the value of the first) gets additional support from an ingenious argument that Michigan law professor Michael Heller initially made and that economist James Buchanan has now followed up on.115 Heller introduces the concept of an “anticommons.” If a commons is a resource where everyone has a right to use the resource (and therefore sometimes overuse the resource), an anticommons is a resource where many have the right to block the use of a resource by others (and therefore many more underuse the resource)... Nobel Prize–winning economist James Buchanan has expanded this idea to the problem of regulation generally.116 He points to the problem of patents in particular as an example where multiple and overlapping patent protection may create an anticommons, where innovators are afraid to innovate in a field because too many people have the right to veto the use of a particular resource or idea. This potential for strategic behavior by these many rights holders makes it irrational for an innovator to develop a particular idea, just as the possibility of veto by many bureaucrats may leave a particular piece of real property underdeveloped.}, | ||
| + | tags={#Core Paper}, | ||
| + | filename={Lessig (2001) - The Future Of Ideas.pdf} | ||
} | } | ||
| Line 461: | Line 570: | ||
year={2004}, | year={2004}, | ||
abstract={This paper is the first part of a wide-ranging study of the role of intellectual property in the software industry. The project focuses on the software industry because of the importance of that industry to the modern economy, because of the importance of innovation to that industry, and because of the well-known difficulties of accommodating traditional intellectual-property regimes (patent, copyright, and trade secret) to innovation in the industry. This paper focuses on innovation in the hundreds of small venture-backed firms that form the bulk of the population of the industry. After a brief description of the history of the industry in Part II, Part III discusses the evidence on which the paper relies: a set of about 50 interviews of industry executives – diversified geographically, by size of company, and by role in the industry (software developers, venture capitalists, lenders, etc.). Relying on those interviews, the paper provides a detailed explication of the role that intellectual property plays in the industry. Parts IV through VI of the paper organize the information from the interviews and situate it in the extensive literatures on venture capital investing, the economics of innovation, and patents. The first substantive topic of the paper (Part IV) is the features of startup firms that attract investment by venture capitalists – generally something about the startup that suggests a “sustainable differentiation” of the firm from its competitors. The differentiation could come from any number of advantages the firm has – a first-mover advantage, special skill of its employees, a unique approach to solving a difficult problem, or, in some cases, intellectualproperty protection.The second substantive part of the paper (Part V) discusses the role of copyright. The major point of this part is that copyright protection is of little value to startup firms. Copyright protection is designed to protect expression, and not functionality. Thus, it provides little of the protection for which venture investors are looking. The basic problem is that it does not offend copyright law if a competitor observes a software product and designs a new product that includes precisely the same functionality, so long as the competitor uses none of the “expression” from the first product. Because the competitor’s customers are for the most part interested in the functionality, not the expression, this is not an important constraint. On the other hand, copyright protection does provide important protections in other areas, most obviously in protecting the later-stage firm’s products from piracy. Generally, this part of the paper tells a story of unsuccessful efforts to stretch the copyright regime to do something it never was intended to do. The final substantive part of the paper (Part VI) discusses the role of patents. Because patents do protect functionality, they have at least the theoretical potential to provide the sustainable differentiation for which investors are looking. The problem, however, is that in many sectors of the software industry innovation is not of a character that a typical patent can protect a firm from competitors: often competitors would be able to design a competing product that works around a firm’s patent. Thus, despite significant increases in patenting in the industry, about 80% of venture-backed software firms do not obtain patents during the early years of their existence. The question, then, is what benefits patents do provide to those firms. This part explores several benefits, including the classic benefit of excluding competitors. In this industry at least, that benefit accrues primarily to small firms, protecting them from the competitive depredations of incumbents. Incumbents, by contrast, rarely use patents to exclude smaller firms from the industry. The part also discusses a series of less conventional benefits small firms gain from software patents: as barter in cross-licensing arrangements, in signaling their technical competence to third parties, in converting tacit knowledge into a verifiable and transferable form, and in making the firm attractive to potential acquirers. The paper closes by discussing the implications of the patent analysis for recent debates about the value of patents in the software industry. The paper starts with a discussion of theoretical literature suggesting that free availability of patented technology is important because of the software industry’s reliance on cumulative patterns of innovation. It then presents evidence about existing practices in the industry suggests that technology in fact is readily available, rebutting the prominent claims of a patent “thicket” that is supposedly stifling innovation in the industry. On the contrary, I argue, to the extent patents have an important effect in the industry, it is an effect that inures primarily to the benefit of the smaller firms trying to find a foothold from which they can compete.}, | abstract={This paper is the first part of a wide-ranging study of the role of intellectual property in the software industry. The project focuses on the software industry because of the importance of that industry to the modern economy, because of the importance of innovation to that industry, and because of the well-known difficulties of accommodating traditional intellectual-property regimes (patent, copyright, and trade secret) to innovation in the industry. This paper focuses on innovation in the hundreds of small venture-backed firms that form the bulk of the population of the industry. After a brief description of the history of the industry in Part II, Part III discusses the evidence on which the paper relies: a set of about 50 interviews of industry executives – diversified geographically, by size of company, and by role in the industry (software developers, venture capitalists, lenders, etc.). Relying on those interviews, the paper provides a detailed explication of the role that intellectual property plays in the industry. Parts IV through VI of the paper organize the information from the interviews and situate it in the extensive literatures on venture capital investing, the economics of innovation, and patents. The first substantive topic of the paper (Part IV) is the features of startup firms that attract investment by venture capitalists – generally something about the startup that suggests a “sustainable differentiation” of the firm from its competitors. The differentiation could come from any number of advantages the firm has – a first-mover advantage, special skill of its employees, a unique approach to solving a difficult problem, or, in some cases, intellectualproperty protection.The second substantive part of the paper (Part V) discusses the role of copyright. The major point of this part is that copyright protection is of little value to startup firms. Copyright protection is designed to protect expression, and not functionality. Thus, it provides little of the protection for which venture investors are looking. The basic problem is that it does not offend copyright law if a competitor observes a software product and designs a new product that includes precisely the same functionality, so long as the competitor uses none of the “expression” from the first product. Because the competitor’s customers are for the most part interested in the functionality, not the expression, this is not an important constraint. On the other hand, copyright protection does provide important protections in other areas, most obviously in protecting the later-stage firm’s products from piracy. Generally, this part of the paper tells a story of unsuccessful efforts to stretch the copyright regime to do something it never was intended to do. The final substantive part of the paper (Part VI) discusses the role of patents. Because patents do protect functionality, they have at least the theoretical potential to provide the sustainable differentiation for which investors are looking. The problem, however, is that in many sectors of the software industry innovation is not of a character that a typical patent can protect a firm from competitors: often competitors would be able to design a competing product that works around a firm’s patent. Thus, despite significant increases in patenting in the industry, about 80% of venture-backed software firms do not obtain patents during the early years of their existence. The question, then, is what benefits patents do provide to those firms. This part explores several benefits, including the classic benefit of excluding competitors. In this industry at least, that benefit accrues primarily to small firms, protecting them from the competitive depredations of incumbents. Incumbents, by contrast, rarely use patents to exclude smaller firms from the industry. The part also discusses a series of less conventional benefits small firms gain from software patents: as barter in cross-licensing arrangements, in signaling their technical competence to third parties, in converting tacit knowledge into a verifiable and transferable form, and in making the firm attractive to potential acquirers. The paper closes by discussing the implications of the patent analysis for recent debates about the value of patents in the software industry. The paper starts with a discussion of theoretical literature suggesting that free availability of patented technology is important because of the software industry’s reliance on cumulative patterns of innovation. It then presents evidence about existing practices in the industry suggests that technology in fact is readily available, rebutting the prominent claims of a patent “thicket” that is supposedly stifling innovation in the industry. On the contrary, I argue, to the extent patents have an important effect in the industry, it is an effect that inures primarily to the benefit of the smaller firms trying to find a foothold from which they can compete.}, | ||
| − | discipline={ | + | discipline={Law}, |
| − | research_type={ | + | research_type={Survey}, |
industry={Software}, | industry={Software}, | ||
| − | thicket_stance={}, | + | thicket_stance={Anti}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={What all of this means for purposes of potential patent thickets is that potential innovators know that the large mass of existing patents held by IBM and Microsoft are likely to receive some share of revenues from any major new product. There is, of course, nothing wrong with that. IBM does spend billions of dollars each year on research and development related to the software technology on which it receives patents. It is not alone in that practice.290 The fact that it can earn royalties from those patents through freely licensing them to all comers does not suggest a patent thicket. On the contrary, a patent thicket would exist only if industry licensing practices were such that firms in the industry commonly were unable to agree on terms for licenses and thus retreated from the field of innovation. That is not a plausible portrait of the commercial software industry as it now exists.}, |
| − | thicket_def={References Shapiro, References Heller/Eisenberg, Overlapping Patents, Cummulative Invention, Unspecified Blocking Mechanism}, | + | thicket_def={#A, #B, References Shapiro, References Heller/Eisenberg, Overlapping Patents, Cummulative Invention, Unspecified Blocking Mechanism}, |
thicket_def_extract={The broadest form of the criticism – associated with Carl Shapiro and Larry Lessig – argues that the rapid proliferation of software patents has created a “patent thicket” that deters innovation, particularly by small firms that are not well placed to compete against the portfolios of their larger and better-heeled competitors... Larry Lessig presents it forcefully as a matter of truth that the proliferation of software patents has created a patent “thicket” (Shapiro’s term)256 or an “anticommons” (a term Lessig draws from Michael Heller’s work with Becky Eisenberg257). This concern also pervades James Bessen’s work (by himself and with other co-authors).258 Specifically, the idea is that there are so many overlapping patents in the industry that potential innovators cannot readily obtain the approvals necessary to conduct their research... On the contrary, a patent thicket would exist only if industry licensing practices were such that firms in the industry commonly were unable to agree on terms for licenses and thus retreated from the field of innovation. That is not a plausible portrait of the commercial software industry as it now exists.}, | thicket_def_extract={The broadest form of the criticism – associated with Carl Shapiro and Larry Lessig – argues that the rapid proliferation of software patents has created a “patent thicket” that deters innovation, particularly by small firms that are not well placed to compete against the portfolios of their larger and better-heeled competitors... Larry Lessig presents it forcefully as a matter of truth that the proliferation of software patents has created a patent “thicket” (Shapiro’s term)256 or an “anticommons” (a term Lessig draws from Michael Heller’s work with Becky Eisenberg257). This concern also pervades James Bessen’s work (by himself and with other co-authors).258 Specifically, the idea is that there are so many overlapping patents in the industry that potential innovators cannot readily obtain the approvals necessary to conduct their research... On the contrary, a patent thicket would exist only if industry licensing practices were such that firms in the industry commonly were unable to agree on terms for licenses and thus retreated from the field of innovation. That is not a plausible portrait of the commercial software industry as it now exists.}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Mann (2004) - The Myth Of The Software Patent Thicket]].pdf} | filename={[[Mann (2004) - The Myth Of The Software Patent Thicket]].pdf} | ||
| + | } | ||
| + | |||
| + | @article{mann2005patents, | ||
| + | title={Do Patents Facilitate Financing in the Software Industry?}, | ||
| + | author={Mann, Ronald J}, | ||
| + | journal={Texas Law Review}, | ||
| + | volume={83}, | ||
| + | pages={961--1009}, | ||
| + | year={2005}, | ||
| + | abstract={The economic significance of a patent depends on its scope: the broader the scope, the larger the number of competing products and processes that will infringe the patent. Many theoretical papers have tried to assess the effects of fine tuning various aspects of the patent system to make it more efficient.' But only a few have focussed on patent scope,2 even though scope decisions are subject to far more discretion than most of the aspects more intensively studied. Furthermore, most theoretical writing on patents is directed toward issues that as a practical matter are considered largely settled. For example, several economists have explored the question of optimal patent duration.3 Their work did have a direct impact on the decision to extend patent terms on pharmaceuticals to compensate for regulatory lag.4 But despite the scholarly attention to patent duration, the term of most patents remains fixed at seventeen years.5 Likewise, there has been considerable debate over the years on the merits of compulsory licensing of patents under some circumstances,6 yet the intellectual property community has repeatedly rejected the idea.7 Thus, while the literature continues to generate interesting questions about bedrock assumptions and practices, it has little bearing on the everyday operations of the patent system. This Article is an attempt to redress this deficiency by analyzing the economic effects of patent scope.}, | ||
| + | discipline={Law}, | ||
| + | research_type={Theory, Survey}, | ||
| + | industry={Software}, | ||
| + | thicket_stance={Anti}, | ||
| + | thicket_stance_extract={The actual structure and practices of the industry belie any claim of a patent thicket}, | ||
| + | thicket_def={#A-ST, #B-ST, References Shapiro, References Heller/Eisenberg, Overlapping Patents, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism}, | ||
| + | thicket_def_extract={Most famously, Lassig argues that the proliferation of software patents has created an "anticommons" or a patent thicket... so many overlapping patents in the industry that potential innovators cannot readily obtain the approvals necessary to conduct their research. The premise of the model is that assiets will go unused because of the costs of obtaining the permissions necessary to use them.}, | ||
| + | tags={#Core Paper, Software, Survey, No Thickets!, No Search}, | ||
| + | filename={[[Mann (2005) - Do Patents Facilitate Financing In The Software Industry]].pdf} | ||
} | } | ||
| − | @ | + | @article{merges1996contracting, |
| − | title={ | + | title={Contracting into liability rules: Intellectual property rights and collective rights organizations}, |
| − | author={ | + | author={Merges, Robert P}, |
| − | + | journal={Cal L. Rev.}, | |
| − | + | volume={84}, | |
| − | abstract={ | + | pages={1293}, |
| − | discipline={ | + | year={1996}, |
| + | abstract={As intellectual property rights have gained in prominence, businesspeople and scholars alike have complained of the increasing burden of obtaining intellectual property licenses and, failing this, litigating intellectual property disputes. Intellectual property experts, especially scholars, have responded to this burgeoning thicket of rights with a series of initiatives to expedite deal making by means of statutory compulsory licensing. These licenses are classic examples of "liability rulesh" in the foundational legal entitlements framework of Guido Calabresi and A. Douglas Melamed. They appear to be a compromise: they address the mushrooming transactional hurdle created by new and stronger intellectual property rights, while preserving most of the economic advantages that accompany strengthened rights. In this Article, Professor Merges argues that proposals to create more compulsory licenses are rooted in a faulty theoretical framework. Based on a survey of the diverse institutions various industries have cultivated to handle intellectual property transactions, Merges contends that "repeat players" (individuals and firms that frequently need to exchange rights) can and often do take steps to overcome transactional bottlenecks. Whether through copyright collectives, such as ASCAP and BMI in the music industry, or undertakings such as patent pools in automobile and aircraft manufacturing, those with a recurring need to transact in intellectual property rights invest in administrative structures that lower the costs of exchanging rights. Among other functions, these collective rights organizations promulgate rules and procedures for placing a monetary value on members' property rights. They thus conserve on transaction costs either by making it easier to identify and locate rightholders, or by creating the occasion for repeat-play, reciprocal bargaining, versus more costly one-shot exchanges. Drawing on a body of academic literature known as the new institutional economics, Professor Merges explains and analyzes the origins and operation of these organizations. He also argues that entitlement theory must be adjusted to recognize the possibility that such institutions will evolve out of a background of strong property rights. More generally, he points out that entitlement theory ought to incorporate a more dynamic understanding of the importance of contracting after entitlements are granted. Professor Merges applies his observations and theoretical insights to an important contemporary controversy: whether Congress ought to legislate a compulsory license for digital content needed by the multimedia industry. He argues that it should not. Given the underlying economics, and consistent with experience in other industries, existing intellectual property rights will force industry participants to invest in institutions to conduct transactions. Indeed, consistent with the analysis in this Article, evidence indicates this is already occurring}, | ||
| + | discipline={Law}, | ||
| + | research_type={Theory, Discussion}, | ||
| + | industry={General}, | ||
| + | thicket_stance={Pro}, | ||
| + | thicket_stance_extract={As intellectual property rights have gained in prominence, businesspeople and scholars alike have complained of the increasing burden of obtaining intellectual property licenses and, failing this, litigating intellectual property disputes. Intellectual property experts, especially scholars, have responded to this burgeoning thicket of rights with a series of initiatives to expedite deal making by means of statutory compulsory licensing.}, | ||
| + | thicket_def={#A-T, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism}, | ||
| + | thicket_def_extract={This Article is aimed at providing conceptual guidance for those who need to traverse the new thicket of intellectual property rights (IPRs).' Each vine, each plant, standing in one's path represents a distinct IPR owned by an individual. To pass through, one needs a license from each owner. Where a single right blocks the path, this is easy: a single licensing contract does the trick. Today, however, business people more often than not encounter a tangled, twisted mass of IPRs, which criss-cross the established walkways of commerce. Progress along this path does not come cheaply; rather, it requires numerous contracts with multiple, independent right holders}, | ||
| + | tags={#Core Paper, Seminal Theory!, First Thicket Metaphor, Copyright, Patents}, | ||
| + | filename={[[Merges (1996) - Contracting Into Liability Rules]].pdf} | ||
| + | } | ||
| + | |||
| + | @article{merges1999institutions, | ||
| + | title={Institutions for intellectual property transactions: the case of patent pools}, | ||
| + | author={Merges, Robert P}, | ||
| + | journal={University of California at Berkeley Working Paper}, | ||
| + | year={1999}, | ||
| + | abstract={In this Chapter I hope to accomplish three things: briefly summarize trends in the economic theory of intellectual property rights (IPRs); describe some ideas of my own on the emergence of IPR exchange institutions, and describe how an emphasis on institutions fits into existing theory; and ground these issues in a discussion of collective IPR licensing, in particular, patent pools. I begin with a discussion of how transactions have crept into IP theory, and then turn to an examination of actual institutions that have evolved out of the need for various industries to conduct a large volume of IPR transactions.}, | ||
| + | discipline={Law}, | ||
research_type={Discussion}, | research_type={Discussion}, | ||
| − | industry={ | + | industry={General}, |
| − | thicket_stance={}, | + | thicket_stance={Neutral}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={The way forward from here is obvious. We need both more data, and more nuanced theory to account for it. And we also need a better understanding of when and how government policy can be brought to bear on these issues. For example, we are just beginning to see how patterns of post-grant transactions affect the economic impact of various property right entitlements. This will have obvious implications for our thinking about the proper contours of property right grants. At the same time, it is likely that in certain cases it will be very difficult or impossible to see far enough down the road to predict the post-grant landscape. In such cases, we must be sensitive to the need for rules and doctrines that permit the “visible hand” of government to prod or even force parties into transactions.}, |
| − | thicket_def={ | + | thicket_def={#A-T, #B-T, References Heller/Eisenberg, Overlapping Patents, Cummulative Invention, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up}, |
| − | thicket_def_extract={ | + | thicket_def_extract={The recently developed “anticommons” theory associated with Michael Heller and (as applied to IPR problems) Heller and Rebecca Eisenberg , advances this theme by more explicitly analyzing interactions between property rights and transactions.7 The basic idea is that granting too many property rights of too small a scale can preclude effective exploitation of economic resources. Heller defines an “anticommons” as an economic resource that is covered by a large number of individual exclusionary rights. Businesspeople must bundle numerous rights to make good use of the resource.8 If various impediments to bargaining are present, this may prove difficult; as a result, the resource may be underutilized.9 The authors present two “current examples in biomedical research”: the creation of “too many concurrent fragments of [IPRs] in potential future products,” and rules permitting 7 “too many upstream patent owners to stack licenses on top of the future discoveries of downstream users.”12... Heller identifies bargaining failures, holdup problems in particular, as a key reason for anticommons tragedies. As he points out, in many settings rights are held by parties who will not undergo repeat interactions.... Anticommons theory tells a series of similar cautionary tales about the doleful effects of too many overlapping property rights... The next step is to address the issues identified by anticommons theory: strategic behavior 34 and cognitive bias.... The optimists have not for the most part studied the gene fragment “business,” which in any case is still forming. They have instead concentrated on two types of industries: (1) established, technology-intensive industries, where the lineup of players is fairly stable, technological complementarities are common, and patent pools are a familiar sight on the industrial landscape; and (2) industries where IPR-producers are widely scattered but buyers need to buy in bulk, which creates demand for large packages of IPRs}, |
| − | tags={ | + | tags={#Core Paper, IPR Reform}, |
| − | filename={[[ | + | filename={[[Merges (1999) - Institutions For Intellectual Property Transactions]].pdf} |
} | } | ||
| Line 500: | Line 647: | ||
research_type={Discussion}, | research_type={Discussion}, | ||
industry={Sewing}, | industry={Sewing}, | ||
| − | thicket_stance={}, | + | thicket_stance={Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={Additionally, a patent thicket can block new research into follow-on inventions,10 preventing the ?Progress of . . . the useful Arts.?11 There is now a debate raging in the literature as to whether patent thickets in fact lead to such problems,12 and vivid anecdotes abound about obstructed development of new drugs13 or problems in distributing life-enhancing genetically engineered foods to the developing world.... It may be only one illustration of a patent thicket and its attendant concerns, but it is an extremely robust case study, and as such it exposes some of the ways in which contemporary patent thicket theory has become impoverished by its own underlying assumptions.}, |
| − | thicket_def={References Shapiro, References Heller/Eisenberg, Diversely-Held, Transaction Costs, Cummulative Invention, Unspecified Blocking Mechanism}, | + | thicket_def={#A-T, #B-T, References Shapiro, References Heller/Eisenberg, Diversely-Held, Transaction Costs, Cummulative Invention, Unspecified Blocking Mechanism}, |
thicket_def_extract={A ?patent thicket? exists when too many patents covering individual elements of a commercial product are separately owned by different entities.7 This concept is not unique to patent law; it is based on Professor Michael Heller‘s theory of the anticommons in real property, which arises when there is excessive fragmentation of ownership interests in a single parcel of land.8 According to economic theory, the problem of such excessive fragmentation of ownership interests is straightforward: it increases transaction costs, accentuates hold-out problems, and precipitates costly litigation, which prevents commercial development of the affected property.9 Additionally, a patent thicket can block new research into follow-on inventions,10 preventing the ?Progress of . . . the useful Arts.?}, | thicket_def_extract={A ?patent thicket? exists when too many patents covering individual elements of a commercial product are separately owned by different entities.7 This concept is not unique to patent law; it is based on Professor Michael Heller‘s theory of the anticommons in real property, which arises when there is excessive fragmentation of ownership interests in a single parcel of land.8 According to economic theory, the problem of such excessive fragmentation of ownership interests is straightforward: it increases transaction costs, accentuates hold-out problems, and precipitates costly litigation, which prevents commercial development of the affected property.9 Additionally, a patent thicket can block new research into follow-on inventions,10 preventing the ?Progress of . . . the useful Arts.?}, | ||
| − | tags={Patent Pool}, | + | tags={#Core Paper, Patent Pool}, |
filename={[[Mossoff (2011) - Rise And Fall Of The First American Patent Thicket]].pdf} | filename={[[Mossoff (2011) - Rise And Fall Of The First American Patent Thicket]].pdf} | ||
| + | } | ||
| + | |||
| + | @book{mossoff2009stitch, | ||
| + | title={A stitch in time: The rise and fall of the sewing machine patent thicket}, | ||
| + | author={Mossoff, A.}, | ||
| + | year={2009}, | ||
| + | publisher={George Mason University School of Law}, | ||
| + | abstract={Scholarly interest in how anticommons theory applies to patents has skyrocketed since Professor Michael Heller first proposed a decade ago that excessively fragmented interests in land can frustrate its commercial development. There is now a vigorous debate on whether anticommons exist in patent law, and, if so, whether these “patent thickets” impede innovation in patented products. This article contributes to this debate by analyzing the rise and fall of the first patent thicket in American history: the “Sewing Machine War” of the 1850s. The invention of the sewing machine in the antebellum era represents many firsts in the American legal system—the first patent thicket, the first “patent troll,” and the first patent pool. Significantly, this case study verifies that patent thickets exist and that they can frustrate commercial development of new products. But it also challenges widely held assumptions in the patent thicket literature. Many scholars believe that this is largely a modern problem arising from a host of allegedly new issues in the patent system, such as incremental high-tech innovation, excessive litigation, and the rise of “patent trolls.” Yet the sewing machine patent thicket exhibited all of these phenomena, revealing that patent thickets have long existed within the historically successful American patent system. The denouement of the sewing machine patent thicket in the Sewing Machine Combination of 1856, the first privately formed patent pool, further challenges the widely held belief that patent thickets are best solved through new statutes, regulations or court decisions that limit property rights in patents. To the contrary, the Sewing Machine Combination was formed against the backdrop of the strong protection of patent rights in the antebellum era. Thus, the story of the invention of the sewing machine is a striking account of early American technological, commercial and legal ingenuity, which heralds important empirical lessons for how patent thicket theory is understood and applied today.}, | ||
| + | discipline={Econ}, | ||
| + | research_type={Discussion}, | ||
| + | industry={Sewing}, | ||
| + | thicket_stance={Pro}, | ||
| + | thicket_stance_extract={The story of the sewing machine—its incremental invention, the Sewing Machine War, and its ultimate commercial success after the creation of the Sewing Machine Combination—is an important empirical case study of patent thickets. This historical patent thicket challenges the principal focus of the literature on recent inventions and recent changes in patent law, such as the rise of biotech patenting since 1981.237 This too-narrow focus on recent technology and innovation may be impoverishing the policy debates concerning patent thickets.}, | ||
| + | thicket_def={#A-T, #B-T, References Shapiro, References Heller/Eisenberg, Diversely-Held, Transaction Costs, Overlapping Patents, Cummulative Invention}, | ||
| + | thicket_def_extract={Professor Michael Heller first proposed a decade ago that excessively fragmented interests in land can frustrate its commercial development. There is now a vigorous debate on whether anticommons exist in patent law, and, if so, whether these “patent thickets” impede innovation in patented products... A “patent thicket” exists when too many patents covering individual elements of a commercial product are separately owned by different entities... According to economic theory, the problem of such excessive fragmentation of ownership interests is straightforward: It increases transaction costs, accentuates hold-out problems, and precipitates costly litigation, which prevents commercial development of the affected property.12 Additionally, a patent thicket can block new research into follow-on inventions... no one has yet explained why this patent thick arose beyond identifying the fact that there were overlapping patent claims. But this does not by itself create a patent thicket, as there have to be reasons why patent-owners assert these property claims against each other to the point of creating a litigation free-for-all, replicating the conditions of Thomas Hobbes’s state of nature.}, | ||
| + | tags={#Core Paper, Patent Pool}, | ||
| + | filename={[[Mossoff (2009) - A Stitch In Time The Rise And Fall Of The Sewing Machine Patent Thicket]].pdf} | ||
| + | } | ||
| + | |||
| + | @article{murray2007formal, | ||
| + | title={Do formal intellectual property rights hinder the free flow of scientific knowledge?: An empirical test of the anti-commons hypothesis}, | ||
| + | author={Murray, Fiona and Stern, Scott}, | ||
| + | journal={Journal of Economic Behavior \& Organization}, | ||
| + | volume={63}, | ||
| + | number={4}, | ||
| + | pages={648--687}, | ||
| + | year={2007}, | ||
| + | abstract={Although many scholars suggest that IPR has a positive effect on cumulative innovation, a growing “anticommons” perspective highlights the negative role of IPR over scientific knowledge. At its core, this debate is centered on how intellectual property rights over a given piece of knowledge affect the propensity of future researchers to build upon that knowledge in their own scientific research activities. This article frames this issue around the concept of dual knowledge, in which a single discovery may contribute to both scientific research and useful commercial applications, and finds evidence for a modest anti-commons effect. A key implication of dual knowledge is that it may be simultaneously instantiated as a scientific research article and as a patent. Such patent-paper pairs are at the heart of our empirical strategy.We exploit the fact that patents are granted with a substantial lag, often many years after the knowledge is initially disclosed through paper publication. The knowledge associated with a patent-paper pair therefore diffuses within two distinct intellectual property environments, one associated with the pre-grant period and another after formal IP rights are granted. Relative to the expected citation pattern for publications with a given quality level, the anti-commons perspective suggests that the citation rate for a scientific publication should fall after formal IP rights associated with that publication are granted. Employing a differences-in-differences estimator for 169 patent-paper pairs (and including a control group of other publications from the same journal for which no patent is granted), we find evidence for a modest anti-commons effect (the citation rate after the patent grant declines by approximately 10 to 20 percent). This decline becomes more pronounced with the number of years elapsed since the date of the patent grant and is particularly salient for articles authored by researchers with public sector affiliations.}, | ||
| + | discipline={Econ}, | ||
| + | research_type={Discussion, Empirical}, | ||
| + | industry={Academia}, | ||
| + | thicket_stance={Weak Pro}, | ||
| + | thicket_stance_extract={Relative to the expected citation pattern for publications with a given quality level, the anti-commons perspective suggests that the citation rate for a scientific publication should fall after formal IP rights associated with that publication are granted. Employing a differences-in-differences estimator for 169 patent-paper pairs (and including a control group of other publications from the same journal for which no patent is granted), we find evidence for a modest anti-commons effect (the citation rate after the patent grant declines by approximately 10 to 20 percent). This decline becomes more pronounced with the number of years elapsed since the date of the patent grant and is particularly salient for articles authored by researchers with public sector affiliations.}, | ||
| + | thicket_def={#B-T, References Shapiro, References Heller/Eisenberg, Overlapping Patents, Cummulative Invention, Diversely-Held, Transaction Costs}, | ||
| + | thicket_def_extract={In other words, broad patents in complex areas with a high degree of prior art might be expected to be associated with denser patent thickets and hence stronger anti-commons effects. Likewise, prior researchers have suggested that patents over research tools (such as the Oncomouse, cell lines, gene probes) may be associated with larger anti-commons effects for at least two reasons. First, research tools are of broad relevance to many researchers and thus may impinge on many ongoing lines of research. Second, by and large, the uses of research tools are subject to a high degree of transparency in use: materials and tools are usually covered by material transfer agreements and other institutional arrangements.... As the number of prior art references increases, the potential for a “patent thicket” increases (Shapiro, 2001); in the spirit of Heller and Eisenberg (1998), the presence of a patent thicket may exacerbate the anti-commons effect and result in a greater decline in the post-grant citation rate of patented articles.}, | ||
| + | tags={#Core Paper}, | ||
| + | filename={[[Murray Stern (2007) - Do Formal Intellectual Property Rights Hinder The Free Flow Of Scientific Knowledge]].pdf} | ||
} | } | ||
| Line 516: | Line 700: | ||
discipline={Mgmt}, | discipline={Mgmt}, | ||
research_type={Empirical}, | research_type={Empirical}, | ||
| − | industry={}, | + | industry={General}, |
| − | thicket_stance={}, | + | thicket_stance={Weak Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={This paper has investigated empirically how a “patent thicket” affects the patenting propensity and the use of the patents as well as whether it negatively affects the appropriability of the R&D and the patenting of a firm, exploiting a unique measure of the patent thicket from an inventor survey and on data on the use of patents by around 1,200 Japanese firms.... Secondly, we have found that patenting propensity increases more with firm size in the industry where patent thicket is high, controlling for industry fixed effects. Such effects do not exist among small firms.... Thirdly, we have found that while the proportion of used patents declines with firm size, such effect is no stronger in the industry where patent thicket is high. One explanation for this is that cross-licensing is often a response for patent thicket problem... We do not observe significantly larger negative effects of patent thickets on the patent use by every size of firms.}, |
| − | thicket_def={References Shapiro, References Heller/Eisenberg, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up}, | + | thicket_def={#A-T, References Shapiro, References Heller/Eisenberg, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up}, |
| − | thicket_def_extract={A patent thicket is defined as a situation that a firm is required to use many complementary technologies which have been patented by the other firms when this firm produces and sells a product or does research. There are two major causes for patent thickets: (1) a firm needs to use many technologies because of its highly complex products in terms of manufacturing or R&D processes, or product attributes, and (2) many firms compete fiercely in R&D within the same technology area, which results in the fragmented ownership of patents. There is a widespread concern that a firm is blocked from utilizing complementary technologies when a patent thicket exists. Heller and Eisenberg(1998) point out the danger that the extensive patenting of upstream inventions might seriously hinder a firm from doing downstream research in biomedical field of research. They call this phenomenon as “the Tragedy of Anti-commons” in which firms cannot develop efficient contracts to exchange or access complementary technologies effectively among themselves. Shapiro (2001) point out that there are two types of problems caused by a patent thicket: (1) the complements problem; and (2) the hold-up problem}, | + | thicket_def_extract={A patent thicket is defined as a situation that a firm is required to use many complementary technologies which have been patented by the other firms when this firm produces and sells a product or does research. There are two major causes for patent thickets: (1) a firm needs to use many technologies because of its highly complex products in terms of manufacturing or R&D processes, or product attributes, and (2) many firms compete fiercely in R&D within the same technology area, which results in the fragmented ownership of patents. There is a widespread concern that a firm is blocked from utilizing complementary technologies when a patent thicket exists. Heller and Eisenberg(1998) point out the danger that the extensive patenting of upstream inventions might seriously hinder a firm from doing downstream research in biomedical field of research. They call this phenomenon as “the Tragedy of Anti-commons” in which firms cannot develop efficient contracts to exchange or access complementary technologies effectively among themselves. Shapiro (2001) point out that there are two types of problems caused by a patent thicket: (1) the complements problem; and (2) the hold-up problem... These results based on the average size of complementary patents necessary for commercializing an invention are largely consistent with existing empirical studies on patent thickets.}, |
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Nagaoka Nishimura (2006) - An Empirical Assessment Of The Effects Of Patent Thickets]].pdf} | filename={[[Nagaoka Nishimura (2006) - An Empirical Assessment Of The Effects Of Patent Thickets]].pdf} | ||
} | } | ||
| Line 533: | Line 717: | ||
research_type={Empirical}, | research_type={Empirical}, | ||
industry={Software}, | industry={Software}, | ||
| − | thicket_stance={}, | + | thicket_stance={Weak Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={Third, greater concentration (less frag- mentation) of patent rights among rivals reduces both R&D and patenting by the ?rm ?re?ecting less need to have an arsenal of patents to resolve disputes when there are fewer players ?but it increases market value because transaction costs are lower.}, |
| − | thicket_def={References Shapiro, References Heller/Eisenberg, Complementary Inputs, Diversely-Held, Transaction Costs, Strategic Patenting (Bad)}, | + | thicket_def={#A-T, References Shapiro, References Heller/Eisenberg, Complementary Inputs, Diversely-Held, Transaction Costs, Strategic Patenting (Bad)}, |
thicket_def_extract={The argument is that strategic patenting activity creates patent thickets that constrain ?rms?freedom of action in R&D and thus raise the costs of innovation... In such industries, it is a widely held view that patenting activity creates a ?thicket?of fragmented property rights that impedes R&D activity by constrain- ing the ability of ?rms to operate without extensive licensing of complementary technologies. This position was ?rst enunciated by Heller and Eisenberg (1998), who labelled it the ?problem of the anti-commons.?1 By increasing the transaction costs of R&D, patent thickets provide an incentive for ?rms to patent defensively. In e¤ect, this argument implies that patenting creates a negative externality on other ?rms: by increasing the ?rm?s bargaining power in the form of more ?chits to trade?in patent disputes, patenting by one ?rm raises the cost to other ?rms of protecting or appropriating the rents from their innovations. Some authors have claimed that this creates a pris- oner?s dilemma which can lead to excessive patenting in complex technology industries, including semiconductors and software (Bessen and Maskin, 2000).}, | thicket_def_extract={The argument is that strategic patenting activity creates patent thickets that constrain ?rms?freedom of action in R&D and thus raise the costs of innovation... In such industries, it is a widely held view that patenting activity creates a ?thicket?of fragmented property rights that impedes R&D activity by constrain- ing the ability of ?rms to operate without extensive licensing of complementary technologies. This position was ?rst enunciated by Heller and Eisenberg (1998), who labelled it the ?problem of the anti-commons.?1 By increasing the transaction costs of R&D, patent thickets provide an incentive for ?rms to patent defensively. In e¤ect, this argument implies that patenting creates a negative externality on other ?rms: by increasing the ?rm?s bargaining power in the form of more ?chits to trade?in patent disputes, patenting by one ?rm raises the cost to other ?rms of protecting or appropriating the rents from their innovations. Some authors have claimed that this creates a pris- oner?s dilemma which can lead to excessive patenting in complex technology industries, including semiconductors and software (Bessen and Maskin, 2000).}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Noel Schankerman (2006) - Strategic Patenting And Software Innovation]].pdf} | filename={[[Noel Schankerman (2006) - Strategic Patenting And Software Innovation]].pdf} | ||
} | } | ||
| Line 547: | Line 731: | ||
year={2011}, | year={2011}, | ||
abstract={}, | abstract={}, | ||
| − | discipline={Policy Report | + | discipline={Policy Report}, |
research_type={Discussion}, | research_type={Discussion}, | ||
| − | industry={}, | + | industry={General}, |
| − | thicket_stance={}, | + | thicket_stance={Neutral}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={This suggests both that it is too early to systematically weaken the traditional “safeguards” that competition law traditionally imposes on cross-licensing and pool agreements and that, even in “thicket-prone” sectors of activity, leniency toward such agreements should require a demonstration that there are actual thickets that would be cleared by the agreement and even possibly some evidence of the benefits involved in clearing these thickets.}, |
| − | thicket_def={References Shapiro, Complementary Inputs, Diversely-Held, Transaction Costs, Overlapping Patents, Cummulative Invention}, | + | thicket_def={#A-ST, #B-T, References Shapiro, Complementary Inputs, Diversely-Held, Transaction Costs, Overlapping Patents, Cummulative Invention}, |
thicket_def_extract={The terms “thicket” has been used somewhat indiscriminately in competition law circles to describe various types of concentration of IPRs3. In this report, we use the term in a much more specific and precise sense. Following Shapiro’s definition, patent thickets are “an overlapping set of patent rights requiring that those seeking to commercialise new... technology obtain licenses from multiple partners”.4 Two conditions must then be fulfilled for a thicket to arise. Firstly, the production and sale of a given product involves the use of a large number of patent rights. Secondly, the ownership of those rights is dispersed... It is also important to understand the nature of “overlap” of patent rights that helps define a thicket. Such “overlap” has two main sources. Firstly, different patent rights might cover different aspects of the technology required to produce a new product. In other words, several patents might be technologically essential for the commercialisation of a given product. The second source of overlap comes from the nature of patent rights. These rights can be mutually blocking and are moreover uncertain. In practice this means that a firm with a valid patent covering a given aspect X of a new product might still fear that it might infringe another firm’s patent that relates to the same aspect or at least to a similar underlying innovation. In such a situation, access to the other firm’s patent is not technologically necessary but it is required if the firm wants to proceed under conditions of legal certainty... One might therefore settle on the following modification of Shapiro’s definition: patent thickets arise when the IP rights necessary to market a product and do so without significant risk of infringement are held by a large number of different parties.}, | thicket_def_extract={The terms “thicket” has been used somewhat indiscriminately in competition law circles to describe various types of concentration of IPRs3. In this report, we use the term in a much more specific and precise sense. Following Shapiro’s definition, patent thickets are “an overlapping set of patent rights requiring that those seeking to commercialise new... technology obtain licenses from multiple partners”.4 Two conditions must then be fulfilled for a thicket to arise. Firstly, the production and sale of a given product involves the use of a large number of patent rights. Secondly, the ownership of those rights is dispersed... It is also important to understand the nature of “overlap” of patent rights that helps define a thicket. Such “overlap” has two main sources. Firstly, different patent rights might cover different aspects of the technology required to produce a new product. In other words, several patents might be technologically essential for the commercialisation of a given product. The second source of overlap comes from the nature of patent rights. These rights can be mutually blocking and are moreover uncertain. In practice this means that a firm with a valid patent covering a given aspect X of a new product might still fear that it might infringe another firm’s patent that relates to the same aspect or at least to a similar underlying innovation. In such a situation, access to the other firm’s patent is not technologically necessary but it is required if the firm wants to proceed under conditions of legal certainty... One might therefore settle on the following modification of Shapiro’s definition: patent thickets arise when the IP rights necessary to market a product and do so without significant risk of infringement are held by a large number of different parties.}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Regibeau Rockett (2011) - Assessment Of Potential Anticompetitive Conduct]].pdf} | filename={[[Regibeau Rockett (2011) - Assessment Of Potential Anticompetitive Conduct]].pdf} | ||
} | } | ||
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thicket_stance={Weak Pro}, | thicket_stance={Weak Pro}, | ||
thicket_stance_extract={We further argued that the increasing technology monitoring efforts for victims of trolls, namely large manufacturing R&D intensive firms, due to ballooning numbers of patent applications, probably led to the increase of sharks’ relevance for innovators. It facilitates 'trapping’ manufacturers by ‘hiding’ patented technologies in confusing patent thickets—a second necessary condition for sharks to operate. oreover, the strengthening of patent holder’s rights in certain jurisdictions (e.g. the US) most likely enabled sharks to operate more profitably, too.}, | thicket_stance_extract={We further argued that the increasing technology monitoring efforts for victims of trolls, namely large manufacturing R&D intensive firms, due to ballooning numbers of patent applications, probably led to the increase of sharks’ relevance for innovators. It facilitates 'trapping’ manufacturers by ‘hiding’ patented technologies in confusing patent thickets—a second necessary condition for sharks to operate. oreover, the strengthening of patent holder’s rights in certain jurisdictions (e.g. the US) most likely enabled sharks to operate more profitably, too.}, | ||
| − | thicket_def={Complementary Inputs, Diversely-Held, Strategic Patenting (Good)}, | + | thicket_def={#A, Complementary Inputs, Diversely-Held, Strategic Patenting (Good)}, |
thicket_def_extract={Multivariate analysis of the data suggests that in selected discrete technologies, patent ‘fences’ may serve to exclude competitors whereas in complex technologies, ‘thickets’ represent exchange forums for complementary technology.... yielding thickets of complementary patents held by different owners.... Patent thickets owned by various patent holders should prevail in complex technologies such as semiconductors, forcing players to use patents as ‘bargaining chips’.4 Here, from the patentee’s standpoint, exchanging technology should be the first-best use for a patent leading to the highest possible profits as exclusion is virtually infeasible.... As both articles show, the “strategic use” of patents (the two most important types being blocking and cross-licensing with patent ‘thickets’ playing a major role for the latter), has classically been discussed from the perspective of those patent holders who either engage in the production of their own technological goods or consider themselves professional intellectual property suppliers who repeatedly interact with manufacturers.}, | thicket_def_extract={Multivariate analysis of the data suggests that in selected discrete technologies, patent ‘fences’ may serve to exclude competitors whereas in complex technologies, ‘thickets’ represent exchange forums for complementary technology.... yielding thickets of complementary patents held by different owners.... Patent thickets owned by various patent holders should prevail in complex technologies such as semiconductors, forcing players to use patents as ‘bargaining chips’.4 Here, from the patentee’s standpoint, exchanging technology should be the first-best use for a patent leading to the highest possible profits as exclusion is virtually infeasible.... As both articles show, the “strategic use” of patents (the two most important types being blocking and cross-licensing with patent ‘thickets’ playing a major role for the latter), has classically been discussed from the perspective of those patent holders who either engage in the production of their own technological goods or consider themselves professional intellectual property suppliers who repeatedly interact with manufacturers.}, | ||
| − | tags={Private Mechanisms, NPEs, Firm Strategy, Defensive/Offensive Patenting, Value from Position/Portfolio}, | + | tags={#Core Paper, Private Mechanisms, NPEs, Firm Strategy, Defensive/Offensive Patenting, Value from Position/Portfolio}, |
| − | filename={Reitzig Henkel Heath (2007) - On Sharks Trolls And Their Patent Prey.pdf} | + | filename={[[Reitzig Henkel Heath (2007) - On Sharks Trolls And Their Patent Prey]].pdf} |
} | } | ||
| − | + | ||
@incollection{shapiro2001navigating, | @incollection{shapiro2001navigating, | ||
title={Navigating the patent thicket: Cross licenses, patent pools, and standard setting}, | title={Navigating the patent thicket: Cross licenses, patent pools, and standard setting}, | ||
| Line 587: | Line 771: | ||
discipline={Econ}, | discipline={Econ}, | ||
research_type={Discussion, Theory}, | research_type={Discussion, Theory}, | ||
| − | industry={}, | + | industry={General}, |
| − | thicket_stance={}, | + | thicket_stance={Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={This paper takes as given the flood of patents currently being issued by the PTO, and assumes that these patents are indeed creating a patent thicket in the sense that many new products would likely infringe on multiple patents.}, |
| − | thicket_def={Complementary Inputs, Diversely-Held, Transaction Costs}, | + | thicket_def={#A, Complementary Inputs, Diversely-Held, Transaction Costs}, |
thicket_def_extract={See Review}, | thicket_def_extract={See Review}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Shapiro (2001) - Navigating The Patent Thicket]].pdf} | filename={[[Shapiro (2001) - Navigating The Patent Thicket]].pdf} | ||
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| Line 639: | Line 791: | ||
discipline={Econ}, | discipline={Econ}, | ||
research_type={Theory, Empirical}, | research_type={Theory, Empirical}, | ||
| − | industry={}, | + | industry={General, Semiconductor}, |
| − | thicket_stance={}, | + | thicket_stance={Weak Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={The model we provide in this paper shows that licensing allows firms to overcome some serious problems arising from the patent thicket. Thus, ex ante licensing helps firms to reduce somewhat the very strong incentives to patent that can arise in patent thickets.}, |
| − | thicket_def={References Shapiro, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up, Strategic Patenting (Bad)}, | + | thicket_def={#A-ST, #B-ST, #C1, References Shapiro, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up, Strategic Patenting (Bad)}, |
thicket_def_extract={Complex high technology industries are increasingly affected by patent thickets in which firms’ patents mutually block the use of important technologies. Firms facing patent thickets patent intensively to acquire bargaining chips and use licensing to ensure freedom to operate. Such licensing allows rivals to either avoid or resolve hold-up from blocking patents... The complexity and modularity of technology combined with strong increases in the number of patent applications have given rise to patent thickets (Shapiro, 2001; Hall and Ziedonis, 2001). A patent thicket consists of complementary patents related to one technology. The patents in a patent thicket belong to many rival firms. In the absence of cross-licensing agreements, or patent pools, use of the technology is blocked. Avoiding exposure to rivals’ blocking patents is difficult because firms are often not aware of the precise technological trajectory pursued by their rivals (Grindley and Teece, 1997). Additionally, the complexity of high technology products gives rise to connections between patents that are not anticipated. Compounding these problems, the limits of patent rights are always open to interpretation which can lead to unanticipated overlap of patents. Finally, patent offices have limited resources and may overlook prior art or patent overlap (Lemley, 2001).2 In order to contain the threat of hold-up, firms build up large patent portfolios which provide “freedom to operate”... }, | thicket_def_extract={Complex high technology industries are increasingly affected by patent thickets in which firms’ patents mutually block the use of important technologies. Firms facing patent thickets patent intensively to acquire bargaining chips and use licensing to ensure freedom to operate. Such licensing allows rivals to either avoid or resolve hold-up from blocking patents... The complexity and modularity of technology combined with strong increases in the number of patent applications have given rise to patent thickets (Shapiro, 2001; Hall and Ziedonis, 2001). A patent thicket consists of complementary patents related to one technology. The patents in a patent thicket belong to many rival firms. In the absence of cross-licensing agreements, or patent pools, use of the technology is blocked. Avoiding exposure to rivals’ blocking patents is difficult because firms are often not aware of the precise technological trajectory pursued by their rivals (Grindley and Teece, 1997). Additionally, the complexity of high technology products gives rise to connections between patents that are not anticipated. Compounding these problems, the limits of patent rights are always open to interpretation which can lead to unanticipated overlap of patents. Finally, patent offices have limited resources and may overlook prior art or patent overlap (Lemley, 2001).2 In order to contain the threat of hold-up, firms build up large patent portfolios which provide “freedom to operate”... }, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Siebert VonGraevenitz (2010) - Jostling For Advantage Or Not]].pdf} | filename={[[Siebert VonGraevenitz (2010) - Jostling For Advantage Or Not]].pdf} | ||
| + | } | ||
| + | |||
| + | @article{siebert2010licensing, | ||
| + | title={Licensing in the Patent Thicket-Timing and Benefits}, | ||
| + | author={Siebert, R.B. and Von Graevenitz, G.}, | ||
| + | year={2010}, | ||
| + | abstract={Complex high technology industries are increasingly affected by patent thickets in which firms’ patents mutually block the use of important technologies. Firms facing patent thickets patent intensively to acquire bargaining chips and use licensing to ensure freedom to operate. Such licensing allows rivals to either avoid or resolve hold-up from blocking patents. R&D incentives depend on whether licensing takes place ex ante or ex post. We model the choice between ex ante licensing and entry into patent portfolio races leading to ex post licensing. It is shown that higher degrees of blocking lead firms to license ex post, while stronger product market competition leads firms to license ex ante. Empirical results support these theoretical predictions.}, | ||
| + | discipline={Econ}, | ||
| + | research_type={Theory, Empirical}, | ||
| + | industry={General, Semiconductor}, | ||
| + | thicket_stance={Pro}, | ||
| + | thicket_stance_extract={This also indicates that the ”freedom to operate” explanation of licensing is central to understand licensing in patent thickets. Interestingly, the size of firms’ patent portfolios does not affect their propensity to license. However, it does affect firms’ patenting levels. Finally, we find that the fragmentation of patent rights reduces firms’ propensity to license ex ante and ex post. Thus, a deepening of 29 patent thickets resulting from more complex blocking relationships seems to undermine the usefulness of licensing to resolve blocking.}, | ||
| + | thicket_def={#A-T, #D, References Shapiro, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up, Strategic Patenting (Bad), Dubious Patents}, | ||
| + | thicket_def_extract={Licensing can be a solution for hold-up in patent thickets... Explosive growth of patenting world wide has raised fears that patent systems may inhibit economic activity rather than foster it (Jaffe and Lerner, 2004; Bessen and Meurer, 2008). The growth in patenting arising from legal reform (Jaffe, 2000), increasing technological complexity (von Graevenitz et al., 2008) and feedback mechanisms within the patent system (Ziedonis, 2004) is leading to patent thickets (Heller and Eisenberg, 1998; Shapiro, 2001). These occur in semiconductor- and information technology (Hall and Ziedonis, 2001; Ziedonis, 2004) and increasingly in other fields such as genetic diagnostic testing (Huys et al., 2009). In a patent thicket many firms hold patents protecting components of a single technology. Whenever a firm uses such a technology it is vulnerable to hold-up by firms holding blocking patents (Grindley and Teece, 1997; Shapiro, 2001). The threat posed by blocking patents frequently induces firms to build large patent portfolios in costly patent portfolio races. These bolster firms’ bargaining positions in disputes with rivals (Grindley and Teece, 1997; Lemley, 2001). Patent thickets undermine the proper functioning of patent systems: they raise costs of using complex technology and increase incentives to acquire marginal patents.}, | ||
| + | tags={#Core Paper}, | ||
| + | filename={[[Siebert VonGraevenitz (2010) - Licensing In The Patent Thicket Timing And Benefits]].pdf} | ||
} | } | ||
| Line 659: | Line 827: | ||
discipline={Econ}, | discipline={Econ}, | ||
research_type={Measures,Empirical}, | research_type={Measures,Empirical}, | ||
| − | industry={}, | + | industry={Semiconductor}, |
| − | thicket_stance={}, | + | thicket_stance={Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={Network analysis for applicants that had entered cross-license agreements for white LEDs with Nichia confirmed the key position of the firm and untangled self-citation networks for Toyoda Gosei and Cree, hence, representing company-specific patent thickets.}, |
| − | thicket_def={Single Firm, Unspecified Blocking Mechanism}, | + | thicket_def={#D, Single Firm, Unspecified Blocking Mechanism}, |
thicket_def_extract={It therefore seems that the latter company aims to protect its intellectual property by means of a company-specific patent thicket. There are some central patents, some highly cited, and a number of patent families clustered around, citing one or even more central patent families... }, | thicket_def_extract={It therefore seems that the latter company aims to protect its intellectual property by means of a company-specific patent thicket. There are some central patents, some highly cited, and a number of patent families clustered around, citing one or even more central patent families... }, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Sternitzke Bartkowski Schramm (2008) - Visualizing Patent Statistics By Means Of Social Network Analysis Tools]].pdf} | filename={[[Sternitzke Bartkowski Schramm (2008) - Visualizing Patent Statistics By Means Of Social Network Analysis Tools]].pdf} | ||
} | } | ||
| Line 674: | Line 842: | ||
pages={1617}, | pages={1617}, | ||
year={2006}, | year={2006}, | ||
| − | abstract={}, | + | abstract={The network may be the metaphor of the present era. A network, consisting of "nodes" and "links" may be a group of individuals linked by friendship; a group of computers linked by network cables; a system of roads or airline flights or another of a virtually limitless variety of systems of connected things." The past few years have seen an explosion of interest in network science," which seeks to move beyond metaphor to analysis in �elds from physics to sociology. Network science highlights the role of relationship patterns in deter- mining collective behavior. It underscores and begins to address the di�culty of predicting collective behavior from individual interactions. This Article seeks �rst to describe how network science can provide new conceptual and empiri- cal approaches to legal questions because of its focus on analyzing the e�ects of patterns of relationships on collective behavior. The Article then illustrates the network approach by describing a study of the network created by patents and the citations between them. Burgeoning patenting has raised concerns about patent quality, re ected in proposed legislation and in renewed Supreme Court attention to patent law. The network approach allows us to get behind the increasing numbers and investigate the patterns of relationships between patented technologies. We can then distinguish between faster technological progress, increasing breadth of patented technologies, and a lower patentability standard as possible explanations for increased patenting. We �nd that, since the late 1980s, the disparity in likelihood of citation between the most citable" and least citable" patents has grown, suggesting that the least citable patents may represent increasingly trivial inventions. One possible explanation of this increasing strati�cation is increasing reliance by the Federal Circuit Court of Appeals on the widely criticized motivation or suggestion to combine" test for nonobviousness, which is at issue in the case of KSR v. Tele ex, currently pending at the Supreme Court. We also discuss how network science may be employed to address other issues of patent law.}, |
| − | discipline={Law | + | discipline={Law}, |
research_type={Discussion, Measures}, | research_type={Discussion, Measures}, | ||
| − | industry={}, | + | industry={General}, |
| − | thicket_stance={}, | + | thicket_stance={Neutral}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={A high density of patents in a particular technological “niche” need not always indicate a patent thicket, however. Closely related patented technologies may be potential substitutes for one another -- creating something more like patent supermarkets offering many nearly interchangeable options than patent thickets.}, |
thicket_def={Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up, Cummulative Invention}, | thicket_def={Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up, Cummulative Invention}, | ||
| − | thicket_def_extract={There are dire predictions of a patent “thicket,”65 in which technological progress is made increasingly difficult by the need to negotiate multiple levels of “blocking patent” rights on each of the many patented components which may be needed to produce a new commercial product.66 One way to avoid a potential thicket is for competing patent holders to negotiate cross-licenses or “patent pools.”... While the precise significance of a patent citation varies, a citation sometimes indicates that the claims of the cited patent encompass the claims of the citing patent and that a “blocking patent” situation exists so that permission from both patent owners is needed in order to use the invention claimed in the citing patent. As will be discussed in Part V, we believe it is likely that the structure of the patent citation “map” can be mined for signatures of patent “thickets,” in which there is a high density of overlapping patent claims, so as to test, for example, whether such “thickets” are increasingly prevalent in the patent system... On the one hand, there is the fear of a patent “thicket” in which the transaction costs associated with obtaining the necessary patent licenses to do something of practical usefulness... high density of patents in a particular technological “niche” need not always indicate a patent thicket, however. Closely related patented technologies may be potential substitutes for one another -- creating something more like patent supermarkets offering many nearly interchangeable options than patent thickets. If these patents are separately owned, competition between patent holders will reduce licensing fees and the issue of hold-up will not arise.}, | + | thicket_def_extract={#A-T, There are dire predictions of a patent “thicket,”65 in which technological progress is made increasingly difficult by the need to negotiate multiple levels of “blocking patent” rights on each of the many patented components which may be needed to produce a new commercial product.66 One way to avoid a potential thicket is for competing patent holders to negotiate cross-licenses or “patent pools.”... While the precise significance of a patent citation varies, a citation sometimes indicates that the claims of the cited patent encompass the claims of the citing patent and that a “blocking patent” situation exists so that permission from both patent owners is needed in order to use the invention claimed in the citing patent. As will be discussed in Part V, we believe it is likely that the structure of the patent citation “map” can be mined for signatures of patent “thickets,” in which there is a high density of overlapping patent claims, so as to test, for example, whether such “thickets” are increasingly prevalent in the patent system... On the one hand, there is the fear of a patent “thicket” in which the transaction costs associated with obtaining the necessary patent licenses to do something of practical usefulness... high density of patents in a particular technological “niche” need not always indicate a patent thicket, however. Closely related patented technologies may be potential substitutes for one another -- creating something more like patent supermarkets offering many nearly interchangeable options than patent thickets. If these patents are separately owned, competition between patent holders will reduce licensing fees and the issue of hold-up will not arise.}, |
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Strandburg (2006) - Law And The Science Of Networks]].pdf} | filename={[[Strandburg (2006) - Law And The Science Of Networks]].pdf} | ||
} | } | ||
| Line 694: | Line 862: | ||
discipline={Policy Report}, | discipline={Policy Report}, | ||
research_type={Discussion}, | research_type={Discussion}, | ||
| − | industry={}, | + | industry={General}, |
| − | thicket_stance={}, | + | thicket_stance={Neutral}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={In order to explore some of the issues surrounding thickets in more detail, a case study based on safety razors was chosen. This is not one of the traditional high-tech areas presently associated with thickets, being more fundamentally mechanical in nature. However, there is a well known high patent density caused by the market dominance of the main players. The data show that the companies involved are mainly large multinational companies, thus adding to the notion that there may be a barrier to entry. However, there are smaller companies present and as such there is no conclusive evidence either way, at this stage, to suggest that there are barriers to entry. The presence of an SME in a densely populated technology space is encouraging, but the key test is whether these companies can grow and develop within such spaces, and is an area which needs to be addressed in the next round of analysis.}, |
| − | thicket_def={Quotes Shapiro, References Shapiro, Complementary Inputs, Diversely-Held, Overlapping Patents, Cummulative Invention, Single Firm}, | + | thicket_def={#A, #B, #C1, Quotes Shapiro, References Shapiro, Complementary Inputs, Diversely-Held, Overlapping Patents, Cummulative Invention, Single Firm}, |
thicket_def_extract={The phrase “patent thicket” is a descriptive term which highlights issues that new entrants to a market may face when attempting to innovate within, or enter into, a technology space having existing intellectual property rights. The most generally used definition of a thicket is that coined by Shapiro: “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology”. Equal weighting is given to fragmented technological areas (areas where there are large numbers of small patent holdings), or areas where there are small numbers of large players with large patent holdings, each of which creates a thicket that any entrants into the area will have to negotiate in order to be able to operate. There is no clear consensus on terms used to describe patent thickets and the entities involved with them. If these terms were applied consistently, further debate on any issues could be conducted on a level playing field. Any change in policy associated with patent thickets should be carefully considered for its potential impact across different technology landscapes... However, it was interesting to note that some indicators potentially give more useful insight into the type of thicket present... However, despite Shapiro’s comments, on reviewing the general literature in this area, it seems that no concrete definition of a thicket has yet been agreed by researchers, as a number of different interpretations have been created. These definitions tend to fall into a number of forms. Fragmented property rights: • When multiple organisations each own individual patents that are collectively necessary for a particular technology their competing intellectual property rights form a patent thicket10 • Patent thickets are sets of overlapping property rights that occur in fragmented technology Markets11 • A patent thicket exists when too many patents covering individual elements of a commercial product are separately owned by different entities.12 Blocking patents: • “The combination of complex technology and high volume patenting creates patent thickets which can be defined as dense webs of overlapping patent rights... The measure derives directly from information on blocking of one patent by another”13 • “A dense and overlapping set of complementary patent rights…of which at least one patent right is blocking the production of an innovation.” Alternative terms such as “patent floods”15 and “patent clusters”16,17 can also be used. For consistency the term patent thicket has been used throughout the current document. These differing definitions of what exactly a thicket may be, does not aid the reader in comprehending the scope of the issue. Indeed, the idea that patents should not be granted for the same invention, in theory, should not occur as was noted earlier in Section 2 where the scope of claims was discussed.}, | thicket_def_extract={The phrase “patent thicket” is a descriptive term which highlights issues that new entrants to a market may face when attempting to innovate within, or enter into, a technology space having existing intellectual property rights. The most generally used definition of a thicket is that coined by Shapiro: “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology”. Equal weighting is given to fragmented technological areas (areas where there are large numbers of small patent holdings), or areas where there are small numbers of large players with large patent holdings, each of which creates a thicket that any entrants into the area will have to negotiate in order to be able to operate. There is no clear consensus on terms used to describe patent thickets and the entities involved with them. If these terms were applied consistently, further debate on any issues could be conducted on a level playing field. Any change in policy associated with patent thickets should be carefully considered for its potential impact across different technology landscapes... However, it was interesting to note that some indicators potentially give more useful insight into the type of thicket present... However, despite Shapiro’s comments, on reviewing the general literature in this area, it seems that no concrete definition of a thicket has yet been agreed by researchers, as a number of different interpretations have been created. These definitions tend to fall into a number of forms. Fragmented property rights: • When multiple organisations each own individual patents that are collectively necessary for a particular technology their competing intellectual property rights form a patent thicket10 • Patent thickets are sets of overlapping property rights that occur in fragmented technology Markets11 • A patent thicket exists when too many patents covering individual elements of a commercial product are separately owned by different entities.12 Blocking patents: • “The combination of complex technology and high volume patenting creates patent thickets which can be defined as dense webs of overlapping patent rights... The measure derives directly from information on blocking of one patent by another”13 • “A dense and overlapping set of complementary patent rights…of which at least one patent right is blocking the production of an innovation.” Alternative terms such as “patent floods”15 and “patent clusters”16,17 can also be used. For consistency the term patent thicket has been used throughout the current document. These differing definitions of what exactly a thicket may be, does not aid the reader in comprehending the scope of the issue. Indeed, the idea that patents should not be granted for the same invention, in theory, should not occur as was noted earlier in Section 2 where the scope of claims was discussed.}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[UKIPO (2011) - Patent Thickets An Overview]].pdf} | filename={[[UKIPO (2011) - Patent Thickets An Overview]].pdf} | ||
| + | } | ||
| + | |||
| + | @article{von2012incidence, | ||
| + | title={Incidence and Growth of Patent Thickets-The Impact of Technological Opportunities and Complexity}, | ||
| + | author={Von Graevenitz, G. and Wagner, S. and Harhoff, D.}, | ||
| + | journal={Journal of Industrial Economics}, | ||
| + | year={2012}, | ||
| + | abstract={We investigate incidence and evolution of patent thickets. Our empirical analysis is based on a theoretical model of patenting in complex and discrete technologies. The model captures how competition for patent portfolios and complementarity of patents affect patenting incentives. We show that lower technological opportunities increase patenting incentives in complex technologies while they decrease incentives in discrete technologies. Also, more competitors increase patenting incentives in complex technologies and reduce them in discrete technologies. To test these predictions a new measure of the density of patent thickets is introduced. European patent citations are used to construct measures of fragmentation and technological opportunity. Our empirical analysis is based on a panel capturing patenting behavior of 2074 firms in 30 technology areas over 15 years. GMM estimation results confirm the predictions of our theoretical model. The results show that patent thickets exist in 9 out of 30 technology areas. We find that decreased technological opportunities are a surprisingly strong driver of patent thicket growth.}, | ||
| + | discipline={Econ}, | ||
| + | research_type={Empirical}, | ||
| + | industry={General}, | ||
| + | thicket_stance={Pro}, | ||
| + | thicket_stance_extract={We are able to show that patent thickets exist in nine out of thirty technology areas at the EPO. The data we use indicate that the extent of patent thickets at the EPO has been increasing in recent years.}, | ||
| + | thicket_def={#A, #B, References Shapiro, Overlapping Patents, Cummulative Invention, Hold-up, Unspecified Blocking Mechanism}, | ||
| + | thicket_def_extract={The literature on patent thickets shows that several institutional arrangements allow firms to disentangle overlapping property rights - these include licensing, patent pools, standard setting as well as litigation (Shapiro, 2001, Scotchmer, 2005). There is some evidence that firms holding a large share of patents within a given technology benefit substantially from their patent portfolio and may be able to reduce the likelihood of hold-up... Secondly, the conditions under which strategic complementarity is likely to arise in our model fit our current understanding of settings in which patent thickets arise very well. These are settings in which technologies are highly complex, in which many firms seek to build large patent portfolios and in which the combination of multiple parties’ technologies yields the best standards and products... This is attributed to firms’ efforts to reduce potential hold-up by opportunistic patentees owning critical or blocking patent rights – a situation which is associated with the existence of patent thickets... To test our model we derive a new measure of complexity of blocking relationships in patent thickets.}, | ||
| + | tags={#Core Paper}, | ||
| + | filename={[[vonGraevenitz (2012) - Incidence And Growth Of Patent Thickets]].pdf} | ||
} | } | ||
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discipline={Econ}, | discipline={Econ}, | ||
research_type={Measures}, | research_type={Measures}, | ||
| − | industry={}, | + | industry={General}, |
| − | thicket_stance={}, | + | thicket_stance={Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={To demonstrate that the triples measure of patent thicket density is capable of identifying patent thickets, we provide three descriptive results. These have been obtained by applying our algorithm to patent filings at the EPO between 1980 and 2003. Data were taken from the PATSTAT database (”EPO}, |
| − | thicket_def={Quotes Shapiro, References Shapiro, Overlapping Patents, Unspecified Blocking Mechanism, Hold-up}, | + | thicket_def={#A, #B, Quotes Shapiro, References Shapiro, Overlapping Patents, Unspecified Blocking Mechanism, Hold-up}, |
thicket_def_extract={The combination of complex technology and high volume patenting creates patent thickets, which can be defined as dense webs of overlapping patent rights (Shapiro, 2001)... The advantage of the triples measure proposed here is that it provides a simple way of computing the density of patent thickets across technologies and at any given point in time. In this way, the measure enables researchers to analyze the effect of the threat of hold up in different technology areas on firms' patenting strategies.}, | thicket_def_extract={The combination of complex technology and high volume patenting creates patent thickets, which can be defined as dense webs of overlapping patent rights (Shapiro, 2001)... The advantage of the triples measure proposed here is that it provides a simple way of computing the density of patent thickets across technologies and at any given point in time. In this way, the measure enables researchers to analyze the effect of the threat of hold up in different technology areas on firms' patenting strategies.}, | ||
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[VonGraevenitz Wagner Harhoff (2011) - How To Measure Patent Thickets A Novel Approach]].pdf} | filename={[[VonGraevenitz Wagner Harhoff (2011) - How To Measure Patent Thickets A Novel Approach]].pdf} | ||
} | } | ||
| − | @article{ | + | @article{walsh2003effects, |
| − | title={ | + | title={Effects of research tool patents and licensing on biomedical innovation}, |
| − | author={ | + | author={Walsh, John P and Arora, Ashish and Cohen, Wesley M}, |
| − | journal={ | + | journal={Patents in the Knowledge-based Economy}, |
| − | year={ | + | volume={285}, |
| − | abstract={ | + | pages={286}, |
| − | discipline={ | + | year={2003}, |
| − | research_type={ | + | abstract={}, |
| − | industry={}, | + | discipline={Law}, |
| − | thicket_stance={}, | + | research_type={Discussion}, |
| − | thicket_stance_extract={}, | + | industry={Biotech, Pharma}, |
| − | thicket_def={References Shapiro, Overlapping Patents, Cummulative Invention, | + | thicket_stance={Weak Anti}, |
| − | thicket_def_extract={ | + | thicket_stance_extract={Furthermore, Geron has formed a number of nonexclusive licensing agreements for the exploitation of telomerase, typically with small biotech firms possessing complementary technology. Thus, although we again see some evidence of researchers being excluded, we do not find a failure to exploit the target.}, |
| − | tags={}, | + | thicket_def={#A-T, #B-T, References Shapiro, References Heller/Eisenberg, Overlapping Patents, Cummulative Invention, Complementary Inputs, Diversely-Held, Transaction Costs}, |
| − | filename={[[ | + | thicket_def_extract={Heller and Eisenberg (1998) argue that biomedical innovation has become susceptible to what they call a “tragedy of the anticommons,” which can emerge when there are numerous property right claims to separate building blocks for some product or line of research. When these property rights are held by numerous claimants (especially if they are from different kinds of institutions), the negotiations necessary to their combination may fail, quashing the pursuit of otherwise promising lines of research or product development. Heller and Eisenberg suggest that the essential precondition for an anticommons — the need to combine a large number of separately patentable elements to form one product—now applies to drug development because of the patenting of gene fragments or mutations [e.g., expressed sequence tags (ESTs) and single-nucleotide polymorphisms (SNPs)] and a proliferation of patents on research tools that have become essential inputs into the discovery of drugs, other therapies, and diagnostic methods. Heller and Eisenberg (1998) argue that the combining of multiple rights is susceptible to a breakdown in negotiations or, similarly, a stacking of license fees to the point of overwhelming the value of the ultimate product. Shapiro (2000) has raised similar concerns, using the image of the “patent thicket.” He notes that technologies that depend on the agreement of multiple parties are vulnerable to holdup by any one of them, making commercialization potentially difficult.5... Furthermore, Geron has formed a number of nonexclusive licensing agreements for the exploitation of telomerase, typically with small biotech firms possessing complementary technology. Thus, although we again see some evidence of researchers being excluded, we do not find a failure to exploit the target.}, |
| + | tags={#Core Paper}, | ||
| + | filename={[[Walsh Arora Cohen (2003) - Effects Of Research Tool Patents And Licensing On Biomedical Innovation]].pdf} | ||
} | } | ||
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discipline={Econ}, | discipline={Econ}, | ||
research_type={Measures, Empirical}, | research_type={Measures, Empirical}, | ||
| − | industry={}, | + | industry={Semiconductor}, |
| − | thicket_stance={}, | + | thicket_stance={Pro}, |
| − | thicket_stance_extract={}, | + | thicket_stance_extract={Consistent with predictions drawn from transactions cost and anticommons theories, I find that firms acquire patents more aggressively than otherwise predicted when markets for technological inputs are highly fragmented (i.e., when rights to a firm’s complementary patents are widely distributed among outside parties).}, |
| − | thicket_def={References Shapiro, Complementary Inputs, Diversely-Held}, | + | thicket_def={#A-PST, References Shapiro, Complementary Inputs, Diversely-Held}, |
| − | thicket_def_extract={Others raise similar concerns about the effects of dense “thickets” of overlapping patent claims, but predict that firms will “navigate” through these thickets by devising institutional solutions such as patent pools or joint ventures (Merges 2001, Shapiro 2001), or by acquiring firms with blocking patents (Graff et al. 2003)... the additional problems posed by multiple, fragmentary patent owners (i.e., the “patent thicket” or, more precisely, the “diffuse entitlements” problem)... A subtle but important insight from this “anticommons” (or “diffuse entitlements”) theory is that a firm’s bargaining challenge is affected by the level of dispersion among rights holders—not just by the number of patents in a “thicket” or the number of owners per se (as modeled by Shapiro 2001 and Buchanan and Yoon 2002)... Combining insights from transactions cost theory with studies of intellectual property (IP) and its exchange, I predict firms will patent more aggressively than otherwise expected when rights to complementary patents (i.e., ones that would likely be infringed if the firm manufactures or sells its products without a license) are widely distributed among outside entities...}, | + | thicket_def_extract={Others raise similar concerns about the effects of dense “thickets” of overlapping patent claims, but predict that firms will “navigate” through these thickets by devising institutional solutions such as patent pools or joint ventures (Merges 2001, Shapiro 2001), or by acquiring firms with blocking patents (Graff et al. 2003)... the additional problems posed by multiple, fragmentary patent owners (i.e., the “patent thicket” or, more precisely, the “diffuse entitlements” problem)... A subtle but important insight from this “anticommons” (or “diffuse entitlements”) theory is that a firm’s bargaining challenge is affected by the level of dispersion among rights holders—not just by the number of patents in a “thicket” or the number of owners per se (as modeled by Shapiro 2001 and Buchanan and Yoon 2002)... Combining insights from transactions cost theory with studies of intellectual property (IP) and its exchange, I predict firms will patent more aggressively than otherwise expected when rights to complementary patents (i.e., ones that would likely be infringed if the firm manufactures or sells its products without a license) are widely distributed among outside entities... As noted earlier, the degree to which one patent’s claims infringe upon those of others is both difficult and costly to ascertain... To clarify the point, consider a hypothetical example of a semiconductor manufacturer deciding to invest $1 billion in a new fabrication facility (fab). Assume the firm has identified 1,000 patents it believes might be infringed on in the design or manufacture of its products. At this point, however, the firm is still unsure whether these patents are valid and, if so, the effective scope of their claims.}, |
| − | tags={}, | + | tags={#Core Paper}, |
filename={[[Ziedonis (2004) - Dont Fence Me In]].pdf} | filename={[[Ziedonis (2004) - Dont Fence Me In]].pdf} | ||
} | } | ||
| − | == | + | ==Missing Papers (without pages)== |
| − | @ | + | @techreport{clarkson2003sharper, |
| − | + | title={Sharper Machetes for the Patent Thicket: Objective Criteria for Evaluating Patent Pools in the Shadow of Antitrust Enforcement}, | |
| − | + | author={Clarkson, G}, | |
| − | + | year={2003}, | |
| − | + | journal={HBS Working Paper}, | |
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thicket_def={}, | thicket_def={}, | ||
thicket_def_extract={}, | thicket_def_extract={}, | ||
| − | tags={} | + | tags={}, |
| − | filename={ | + | filename={} |
} | } | ||
| − | @ | + | @article{eisenberg2001bargaining, |
| − | title={ | + | title={Bargaining over the transfer of proprietary research tools: is this market failing or emerging}, |
| − | author={ | + | author={Eisenberg, Rebecca S}, |
| − | year={ | + | journal={Expanding the boundaries of intellectual property: innovation policy for the knowledge society}, |
| + | volume={226}, | ||
| + | year={2001}, | ||
| + | publisher={New York: Oxford University Press: pp. 226ff}, | ||
abstract={}, | abstract={}, | ||
discipline={}, | discipline={}, | ||
| Line 827: | Line 981: | ||
thicket_def={}, | thicket_def={}, | ||
thicket_def_extract={}, | thicket_def_extract={}, | ||
| − | tags={} | + | tags={}, |
| − | filename={ | + | filename={} |
} | } | ||
| − | @ | + | @techreport{noel2006patent, |
| − | title={ | + | title={Patent thickets and software innovation: Theory and evidence from a panel of US firms}, |
| − | + | author={Noel, Michael and Schankerman, Mark}, | |
| − | + | year={2006}, | |
| − | + | journal={CEPR Working Paper}, | |
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industry={}, | industry={}, | ||
thicket_stance={}, | thicket_stance={}, | ||
| Line 882: | Line 999: | ||
thicket_def_extract={}, | thicket_def_extract={}, | ||
tags={}, | tags={}, | ||
| − | filename={ | + | filename={} |
} | } | ||
| − | @article{ | + | @article{ziedonis2003patent, |
| − | title={ | + | title={Patent Litigation in the US Semiconductor Industry1}, |
| − | author={ | + | author={Ziedonis, Rosemarie Ham}, |
| − | journal={ | + | journal={Patents in the Knowledge-Based Economy}, |
| − | + | pages={180}, | |
| − | + | year={2003}, | |
| − | + | publisher={National Academy Press}, | |
abstract={}, | abstract={}, | ||
| − | discipline={ | + | discipline={}, |
| − | research_type={ | + | research_type={}, |
| − | industry={ | + | industry={}, |
thicket_stance={}, | thicket_stance={}, | ||
thicket_stance_extract={}, | thicket_stance_extract={}, | ||
| Line 901: | Line 1,018: | ||
thicket_def_extract={}, | thicket_def_extract={}, | ||
tags={}, | tags={}, | ||
| − | filename={ | + | filename={Ziedonis (2003) - Patent Litigation In The Us Semiconductor Industry.pdf} |
} | } | ||
| − | + | ==Duplicate Papers, Early or Non-Relevant Papers== | |
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| − | @article{ | + | @article{cockburn2006entry, |
| − | title={ | + | title={Entry and Patenting in the Software Industry}, |
| − | author={ | + | author={Cockburn, I.M. and MacGarvie, M.J.}, |
| − | journal={ | + | year={2006}, |
| − | + | journal={NBER Working Paper}, | |
| − | abstract={}, | + | institution={National Bureau of Economic Research}, |
| − | discipline={ | + | abstract={To what extent are firms kept out of a market by patents covering related technologies? Do patents held by potential entrants make it easier to enter markets? We estimate the empirical relationship between market entry and patents for 27 narrowly defined categories of software products during the period 1990–2004. Controlling for demand, market structure, average patent quality, and other factors, we find that a 10% increase in the number of patents relevant to market reduces the rate of entry by 3%–8%, and this relationship intensified following expansions in the patentability of software in the mid-1990s. However, potential entrants with patent applications relevant to a market are more likely to enter it. Finally, patents appear to substitute for complementary assets in the entry process, because patents have both greater entry-deterring and entry-promoting effects for firms without prior experience in other markets.}, |
| − | research_type={ | + | discipline={Mgmt}, |
| + | research_type={Empirical}, | ||
industry={Software}, | industry={Software}, | ||
thicket_stance={}, | thicket_stance={}, | ||
thicket_stance_extract={}, | thicket_stance_extract={}, | ||
| − | thicket_def={}, | + | thicket_def={References Shapiro, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism}, |
| − | thicket_def_extract={}, | + | thicket_def_extract={#A-T, #D, Many firms, nonetheless, acquire large portfolios of patents, and even where the primary motivation for doing this goes beyond the potential to exclude competitors, the impact of an accumulated patent “thicket” on entry costs may be substantial (see Shapiro 2001 for a definition of patent thickets)... As all industry participants have responded to increased incentives to obtain patents, the “thicket” in these markets has grown dramatically, imposing greater and greater transactions costs on all firms.}, |
tags={}, | tags={}, | ||
| − | filename={ | + | filename={[[Cockburn MacGarvie (2006) - Entry And Patenting In The Software Industry]].pdf} |
} | } | ||
| − | + | ||
| − | + | @article{galasso2008patent, | |
| − | + | title={Patent Thickets and the Market for Innovation: Evidence from Settlement of Patent Disputes}, | |
| − | + | author={Galasso, A. and Schankerman, M.}, | |
| − | + | year={2008}, | |
| − | + | abstract={We study how fragmentation of patent rights (‘patent thickets’) and the formation of the Court of Appeal for the Federal Circuit (CAFC) affected the duration of patent disputes, and thus the speed of technology diffusion through licensing. We develop a model of patent litigation which predicts faster settlement agreements when patent rights are fragmented and when there is less uncertainty about court outcomes, as was associated with the ‘pro-patent shift’ of CAFC. The model also predicts that the impact of fragmentation on settlement duration should be smaller under CAFC. We confirm these predictions empirically using a dataset that covers nearly all patent suits in U.S. federal district courts during the period 1975-2000. Finally, we analyze how fragmentation affects total settlement delay, taking into account both reduction in duration per dispute and the increase in the number of required patent negotiations associated with patent thickets.}, | |
| − | + | discipline={Econ}, | |
| − | + | research_type={Empirical}, | |
| − | + | industry={General}, | |
| − | + | thicket_stance={Anti}, | |
| − | + | thicket_stance_extract={This paper investigates how fragmentation of patent rights (‘patent thickets’) and the formation of the Court of Appeal for the Federal Circuit (CAFC) affected the duration of patent disputes, and thus the speed of technology diffusion through licensing.... There are two main empirical findings. First, patent disputes in U.S. district courts are settled more quickly when infringers require access to fragmented external rights, but this effect is much weaker after the introduction of CAFC. Second, the introduction of CAFC is associated with a direct and large reduction on the duration of disputes, which the model attributes to less uncertainty about the outcome if the dispute goes to trial. In addition, our calculations suggest that fragmentation may have reduced total negotiation delay, and thus sped up rather 28 than retarded technology diffusion, in some technology areas during the period before CAFC.}, | |
| − | + | thicket_def={#A-T, References Shapiro, References Heller/Eisenberg, Complementary Inputs, Diversely-Held, Transaction Costs}, | |
| − | + | thicket_def_extract={...are the fragmentation of patent rights (often referred to as ‘patent thickets’)... These two effects help reconcile the two opposing views on patent thickets in the recent economic and legal literature — the pro-diffusion view of Licthman (2006) and the anti-commons view of Heller and Eiseberg (1998) and Shapiro (2001)... This result is consistent with the ‘anti-commons’ view: thickets powerfully increase transaction costs and reduce the speed of technology diffusion.}, | |
| − | + | tags={}, | |
| − | + | filename={[[Galasso Schankerman (2008) - Patent Thickets And The Market For Innovation]].pdf} | |
| − | |||
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} | } | ||
| − | + | ||
| − | + | @article{hall2005note, | |
| − | + | title={A note on the bias in Herfindahl-type measures based on count data}, | |
| − | + | author={Hall, B.H.}, | |
| − | + | journal={Revue D' Economie Industrielle, Paris Editions, Techniques Et Economiques}, | |
| − | + | volume={110}, | |
| − | + | pages={149}, | |
| − | + | year={2005}, | |
| − | + | abstract={A Herfindahl index of constructed from shares based on count data where the number of counts is small will generally be biased downward because of the statistical properties of count data and Jensen’s inequality. This note suggests a simple correction for the bias and illustrates its applicability when using measures based on patent data and patent citation data.}, | |
| − | + | discipline={Econ}, | |
| − | + | research_type={Measures}, | |
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industry={}, | industry={}, | ||
thicket_stance={}, | thicket_stance={}, | ||
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thicket_def={}, | thicket_def={}, | ||
thicket_def_extract={}, | thicket_def_extract={}, | ||
| − | tags={} | + | tags={}, |
| − | filename={ | + | filename={[[Hall (2005) - A Note On The Bias In Herfindahl Type Measures Based On Count Data]].pdf} |
} | } | ||
| − | + | ||
| − | + | @article{siebert2008does, | |
| − | + | title={Does Licensing Resolve Hold Up in the Patent Thicket?}, | |
| − | + | author={Siebert, R. and Graevenitz, G.}, | |
| − | + | year={2008}, | |
| − | + | abstract={In a patent thicket licensing provides a mechanism to either avoid or resolve hold up. We study the choice between ex ante licensing to avoid hold up and ex post licensing to resolve it. Firms’ choice of licensing contract is studied in the context of a patent portfolio race. We show that high expected blocking leads to ex ante licensing while ex post licensing arises if expected blocking is low but realized blocking is high. Also, ex ante licensing reduces firms’ R&D incentives. A sample selection model of licensing is derived from the theoretical model. In this framework theoretical predictions on effects of blocking are tested with data from the semiconductor industry. We show that licensing helps firms to resolve blocking. However, licensing is not a cure all: it decreases as fragmentation of property rights increases and arises mainly between large firms with similar market shares. Using a treatment effects model we also confirm the prediction that ex ante licensing reduces the level of R&D investment.}, | |
| − | + | discipline={Econ}, | |
| − | + | research_type={Empirical}, | |
| − | + | industry={semiconductor}, | |
| − | + | thicket_stance={Pro}, | |
| − | + | thicket_stance_extract={This also indicates that the ”freedom to operate” explanation of licensing is central to understand licensing in patent thickets. Interestingly the size of firms’ patent portfolios does not affect their propensity to license. However it does affect firms’ patenting levels. Finally, we find that the fragmentation of patent rights reduces firms’ propensity to license ex ante and ex post. Thus a deepening of 36 patent thickets resulting from more complex blocking relationships seems to undermine the usefulness of licensing to resolve blocking.}, | |
| − | + | thicket_def={#A-T, #B-T, References Shapiro, Complementary Inputs, Diversely-Held, Transaction Costs, Cummulative Invention, Hold-up, Strategic Patenting (Bad)}, | |
| − | + | thicket_def_extract={In a patent thicket licensing provides a mechanism to either avoid or resolve hold up... In some high technology industries the process of research and development is comparable to the continuous extension of a pyramid through the addition of new building blocks at the top [Shapiro (2001)]. Here, the pyramid serves as a metaphor for the cumulativeness of scientific research in complex product industries.1 Firms increasingly protect their contributions to this pyramid with patents. As a result several high technology industries are now affected by a “patent thicket” [Heller and Eisenberg (1998); Hall and Ziedonis (2001); Shapiro (2001)]. In a patent thicket many rival firms hold patents protecting components of a single technology. Whenever a firm uses such a technology it is vulnerable to hold up by firms holding blocking patents [Grindley and Teece (1997), Jaffe (2000), Shapiro (2001)]. The threat posed by blocking patents frequently induces firms to build up a large portfolio of patents. This creates a strong bargaining position for the firm owning the portfolio in any disputes with rivals. In a patent thicket all firms face the prospect of hold up and have strong incentives to patent, which perpetuates the patent thicket. Hold up in a patent thicket may be resolved through licensing of blocking patents.}, | |
| − | + | tags={}, | |
| − | + | filename={[[Siebert Graevenitz (2008) - Does Licensing Resolve Hold Up In The Patent Thicket]].pdf} | |
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Latest revision as of 22:59, 11 April 2013
This page is part of the Patent Thicket Literature Review
Contents
Notes
This page contains the Core Group BibTeX entries in various stages of processing. When processed the BibTeX is used to create a core papers page for each paper, and the filename of the paper becomes a link to its page.
The Processed Core Group BibTeX Records
Papers with reviews in progress
For the reviews see the PTLR Core Papers page. Note that these BibTeX entries have been editting without editting the entries in their pages. Links to the pages are available through the filename tag.
@article{bessen2003patent,
title={Patent Thickets: Strategic Patenting of Complex Technologies},
author={Bessen, J.},
journal={Available at SSRN 327760},
year={2003},
abstract={Patent race models assume that an innovator wins the only patent covering a product. But when technologies are complex, this property right is defective: ownership of a product’s technology is shared, not exclusive. In that case I show that if patent standards are low, firms build “thickets” of patents, especially incumbent firms in mature industries. When they assert these patents, innovators are forced to share rents under cross-licenses, making R&D incentives sub-optimal. On the other hand, when lead time advantages are significant and patent standards are high, firms pursue strategies of "mutual non-aggression." Then R&D incentives are stronger, even optimal.},
discipline={Econ},
research_type={Theory},
industry={General, ICT},
thicket_stance={Pro},
thicket_stance_extract={This paper argues that patent thickets can reduce R&D incentives even when there are no transaction costs, holdup or vertical monopoly problems.},
thicket_def={#A, #C1-T, References Heller/Eisenberg, References Shapiro, Dubious Patents, Diversely-Held, Transaction Costs, Strategic Patenting (Bad)},
thicket_def_extract={The problem Baker describes is often called a "patent thicket." These occur when each product may involve many patents, in contrast with the one-to-one correspondence between products and patents that is assumed in the patent race literature. Recent commentators suggest that lower patenting standards encourage patent thickets, creating difficulties for innovators (see Gallini, 2002, for a review). When innovators must negotiate with large numbers of patentholders, they may face excessive transaction costs (Heller and Eisenberg, 1998), "holdup," and problems of vertical monopoly (Shapiro, 2001).},
tags={#Core Paper, Private Mechanisms, Cross-licensing, Pools, Firm Strategy, Blocking Patents, Sequential Innovation},
filename={Bessen (2003) - Patent Thickets Strategic Patenting Of Complex Technologies.pdf}
}
@article{clarkson2004objective,
title={Objective Identification of Patent Thickets: A Network Analytic Approach},
author={Clarkson, G.},
journal={Harvard Business School Doctoral Thesis},
year={2004},
abstract={When organizations in technology industries attempt to advance their innovative activities, they almost always must be cognizant of the intellectual property rights of others. When further innovation is thwarted, however, the situation can be described as a patent thicket. Although the term “patent thicket” seems to have originated in litigation in the 1970s regarding Xerox’s dominance of a portion of the photocopier industry,1 economist Carl Shapiro reintroduced the term in academic discourse in 2000. Shapiro defines a patent thicket more broadly to encompass the intellectual property portfolios of several companies that form “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology,” and he points out that “with cumulative innovation and multiple blocking patents, … patent rights can have the perverse effect of stifling, not encouraging, innovation” (2000, pg. 120). Despite all that has been written about patent thickets,2 an objective methodology for verifying the existence of a patent thicket has never been developed. Throughout the last 150 years, however, organizations have stumbled into a number of patent thickets and have occasionally responded by constructing patent pools, which this paper defines as organizational structures where multiple firms collectively aggregate patent rights into a package for licensing, either among themselves or to any potential licensees irrespective of membership in the pool. Such collaboration among technologically competing firms, however, has often encountered difficulty from an antitrust standpoint, even if the formation of the pool is pro-competitive. While the existence of a patent thicket is a necessary but insufficient condition for demonstrating that a given collection of patents is a pro-competitive solution to a particular patent thicket problem, the antitrust regime has never had an objective method of verifying the existence of a patent thicket in a given section of patent space. In response to the lack of such a methodology, this paper proposes a tool to facilitate objectively demonstrating the existence of patent thickets.},
discipline={Econ},
research_type={Measures},
industry={General, ICT},
thicket_stance={Pro},
thicket_stance_extract={The numerical analysis of the PRK pool leads to the conclusion that the PRK pool is coincident with a thicket, as does a visual examination of renderings of the PRK pool network and its nearby universe... Answering the question of thicket existence is thus a first step toward empirical usefulness of the theoretical BCIS framework. The proposed methodology thus provides a foundation for further exploration of the nature of patent thickets and the development of policies to facilitate the formation of procompetitive patent pools to solve the problem posed by patent thickets.},
thicket_def={#A-T, #B-T, Quotes Shapiro, References Shapiro, References Heller/Eisenberg, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism, Overlapping Patents, Complementary Inputs, Hold-up, Cummulative Invention},
thicket_def_extract={Although the term “patent thicket” seems to have originated in litigation in the 1970s regarding Xerox’s dominance of a portion of the photocopier industry,1 economist Carl Shapiro reintroduced the term in academic discourse in 2000. Shapiro defines a patent thicket more broadly to encompass the intellectual property portfolios of several companies that form “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology,” and he points out that “with cumulative innovation and multiple blocking patents, … patent rights can have the perverse effect of stifling, not encouraging, innovation”... While the existence of a patent thicket is a necessary but insufficient condition for demonstrating that a given collection of patents is a pro-competitive solution to a particular patent thicket problem, the antitrust regime has never had an objective method of verifying the existence of a patent thicket in a given section of patent space... Patent thickets are not a new phenomenon, and when the total number of owners of the conflicting intellectual property rights is small, the response to the patent thicket problem has often been to cross-license (Grindley & Teece 1997; Teece 1998; Teece 2000). When more than two parties are involved, however, the transaction costs of cross-licensing between all of the parties can be prohibitive, and additional economic barriers exist such as hold-ups and double marginalization... Particularly in the biopharmaceutical industry, patent thickets threaten the process of cumulative innovation because they act “as barriers to entry [that prevent new entrants] from using the technologies protected by such patent thickets”... The standard taxonomy categorizes the economic relationship between individual patents as blocking, complementary, independent, or substitute (Andewelt 1984; Newberg 2000), or “BCIS.” The elimination of substitutes is also a necessary but insufficient condition for a pro-competitive pooling solution to a patent thicket... Given that Shapiro defines a patent thicket as “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology” (2000, pg. 120), measuring density is a logical direction of inquiry. Building upon his premise that a patent pool is a natural market-clearing mechanism that forms within a patent thicket, it should be possible to verify that the density of patents within known pools is higher than the surrounding patent space. If the density measures of established pools are significantly higher than the density of their surrounding patent space, that finding will contribute a new dimension to the definition of patent thickets},
tags={#Core Paper},
filename={Clarkson (2004) - Objective Identification Of Patent Thickets A Network Analytic Approach.pdf}
}
@article{clarkson2005patent,
title={Patent Informatics For Patent Thicket Detection: A Network Analytic Approach For Measuring The Density Of Patent Space},
author={Clarkson, G.},
journal={Academy of Management, Honolulu},
year={2005},
abstract={When organizations in technology industries attempt to advance their innovative activities, they may encounter patent thickets, or dense webs of overlapping intellectual property rights owned by different companies that must be hacked through in order to commercialize new technology. Throughout the last 150 years, however, organizations have stumbled into a number of patent thickets and have occasionally responded by constructing patent pools or organizational structures where multiple firms collectively aggregate patent rights into a package for licensing, either among themselves or to any potential licensees irrespective of membership in the pool. Such collaboration among technologically competing firms, however, has often encountered difficulty from an antitrust standpoint, even if the formation of the pool is pro-competitive. Despite all that has been written lamenting the problem of patent thickets, the antitrust regime has never had an objective method of verifying the existence of a patent thicket in a given section of patent space. In response to the lack of such a methodology, this paper proposes a tool to facilitate objectively demonstrating the existence of patent thickets. This paper proposes a thicket identification methodology that uses a network analytic technique to determine if a patent pool is coincident with a patent thicket by comparing the density of the patent pool to the density of the surrounding patent space. This paper then applies the new methodology to two existing patent pools and verifies the existence of underlying patent thickets.... Patent thickets are not a new phenomenon, and when the total number of owners of the conflicting intellectual property rights is small, the response to the patent thicket problem has often been to cross-license (Grindley & Teece 1997; Teece 1998; Teece 2000). When more than two parties are involved, however, the transaction costs of cross-licensing between all of the parties can be prohibitive, and additional economic barriers exist such as hold-ups and double marginalization (Viscusi et al. 2000).},
discipline={Econ},
research_type={Measures},
industry={General, ICT},
thicket_stance={Pro},
thicket_stance_extract={The numerical analysis of the PRK pool leads to the conclusion that the PRK pool is coincident with a thicket, as does a visual examination of renderings of the PRK pool network and its nearby universe... Although the proposed methodology does not attempt to assess the BCIS relationships within a patent thicket, this paper is the first attempt to objectively demonstrate the existence of patent thickets.},
thicket_def={#A-T, #B-T, Quotes Shapiro, References Shapiro, References Heller/Eisenberg, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism, Overlapping Patents, Complementary Inputs, Hold-up, Cummulative Invention},
thicket_def_extract={When organizations in technology industries attempt to advance their innovative activities, they may encounter patent thickets, or dense webs of overlapping intellectual property rights owned by different companies that must be hacked through in order to commercialize new technology... Using Shapiro’s definition of a patent thicket as the starting point, two conditions must be satisfied in order for a collection of patents to be a patent thicket: the collection of patents must be both “dense” and “overlapping”(2000, pg. 120).},
tags={#Core Paper},
filename={Clarkson (2005) - Patent Informatics For Patent Thicket Detection.pdf}
}
@article{clarkson2006problem,
title={The Problem Of Patent Thickets In Convergent Technologies},
author={Clarkson, G. and DeKorte, D.},
journal={Annals of the New York Academy of Sciences},
volume={1093},
number={1},
pages={180--200},
year={2006},
abstract={Patent thickets are unintentionally dense webs of overlapping intellectual property rights owned by different companies that can retard progress. This article begins with a review of existing research on patent thickets, focusing in particular on the problem of patent thickets in nanotechnology, or nanothickets. After presenting visual evidence of the presence of nanothickets using a network analytic technique, it discusses potential organizational responses to patent thickets. It then reviews the existing research on patent pools and discusses pool formation in the shadow of antitrust enforcement. Based on recent research on patent pool formation, it examines the divergent fate of two recent pools and discusses the prospects for the future formation of nanotechnology patent pools, or nanopools.},
discipline={Mgmt},
research_type={Discussion},
industry={Nanotech},
thicket_stance={Pro},
thicket_stance_extract={After presenting visual evidence of the presence of nanothickets using a network analytic technique, it discusses potential organizational responses to patent thickets..},
thicket_def={#A-T, #B-T, Quotes Shapiro, References Shapiro, References Heller/Eisenberg, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism, Overlapping Patents, Complementary Inputs, Cummulative Invention},
thicket_def_extract={...for the formation of patent thickets. These dense webs of overlapping intellectual property rights owned by different companies (Shapiro 2000) can present a significant barrier that must be hacked through in order to commercialize new technology. In other industries characterized by cumulative innovations and multiple blocking patents, the existence of such densely concentrated patent rights can have the perverse effect of stifling innovation rather than encouraging it. Such patent thickets are already problematic in other convergent technology areas such as biotechnology (Heller and Eisenberg 1998; Clark et al. 2000; Horn 2003) and information technology (Clarkson 2004)... When multiple organizations each own individual patents that are collectively necessary for a particular technology, however, their competing intellectual property rights form a “patent thicket”},
tags={#Core Paper},
filename={Clarkson DeKorte (2006) - The Problem Of Patent Thickets In Convergent Technologies.pdf}
}
@article{cockburn2011entry,
title={Entry and Patenting in the Software Industry},
author={Cockburn, I.M. and Macgarvie, M.J.},
journal={Management science},
volume={57},
number={5},
pages={915--933},
year={2011},
abstract={To what extent are firms kept out of a market by patents covering related technologies? Do patents held by potential entrants make it easier to enter markets? We estimate the empirical relationship between market entry and patents for 27 narrowly defined categories of software products during the period 1990-2004. Controlling for demand, market structure, patent quality, and other factors, we find that a 10% increase in the number of patents relevant to market reduces the rate of entry by 3-8%, and this relationship intensified following expansions in the patentability of software in the mid- 1990s. However, potential entrants with patent applications relevant to a market are 2-3 times more likely to enter it. Finally, patents appear to substitute for complementary assets in the entry process, as patents have both greater entry-deterring and entrypromoting effects for firms without prior experience in other markets.},
discipline={Mgmt},
research_type={Empirical},
industry={Software},
thicket_stance={Pro},
thicket_stance_extract={Patent thickets, at least as measured here, thus appear to substantially raise entry costs. This is not to say that the overall effect of strengthening software patents was necessarily negative, at least in an absolute sense. The markets in our sample saw substantial overall growth in sales and in the number of participants during this period. Any negative impact of patent thickets on entry is felt as forgone potential for even higher rates of entry, and this may be mitigated by the stimulating effects of stronger patent protection. As discussed above, strengthening or clarifying property rights has potential benefits as well as costs, and we estimate a positive and significant main effect of regime changes on entry, all else equal. But transactions costs associated with thickets may have interesting dynamic effects: while incumbents enjoy increased protection for current innovations, larger thickets will also raise their costs of introducing future generations of innovations. With both entrants and incumbents facing strong incentives to acquire patents, which in turn contribute to even larger thickets and higher associated transactions costs, all market participants can become negatively affected. These dynamics may underlie opportunities emerging for new organizational forms and business models that eliminate (or arbitrage) transactions costs associated with patent thickets.},
thicket_def={#A-T, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism, Cummulative Invention},
thicket_def_extract={As all industry participants have responded to increased incentives to obtain patents, the “thicket” in these markets has grown dramatically, imposing greater and greater transactions costs on all firms.... As discussed above, it may not be just the absolute number of patents in an area that can deter entry, but also the total cost to an entrant of licensing its way through the thicket. One salient feature of patent thickets is the potential for higher costs associated with negotiating with many parties. To the extent that there are fixed costs of conducting a negotiation, having to deal with more parties will drive up costs of obtaining licenses. There may also be transactions costs associated with bargaining and coordinating negotiations with multiple licensors... But transactions costs associated with thickets may have interesting dynamic effects: while incumbents enjoy increased protection for current innovations, larger thickets will also raise their costs of introducing future generations of innovations.},
tags={#Core Paper},
filename={Cockburn Macgarvie (2011) - Entry And Patenting In The Software Industry.pdf}
}
@article{cockburn2009patents,
title={Patents, Thickets and the Financing of Early-Stage Firms: Evidence from the Software Industry},
author={Cockburn, I.M. and MacGarvie, M.J.},
journal={Journal of Economics \& Management Strategy},
volume={18},
number={3},
pages={729--773},
year={2009},
abstract={The impact of stronger intellectual property rights in the software industry is controversial. One means by which patents can affect technical change, industry dynamics, and ultimately welfare, is through their role in stimulating or stifling entry by new ventures. Patents can block entry, or raise entrants’ costs in variety of ways, while at the same time they may stimulate entry by improving the bargaining position of entrants vis-à-vis incumbents, and supporting a “market for technology” which enables new ventures to license their way into the market, or realize value through trade in their intangible assets. One important impact of patents may be their influence on capital markets, and here we find evidence that the extraordinary growth in patenting of software during the 1990s is associated with significant effects on the financing of software companies. Start-up software companies operating in markets characterized by denser patent thickets see their initial acquisition of VC funding delayed relative to firms in markets less affected by patents. The relationship between patents and the probability of IPO or acquisition is more complex, but there is some evidence that firms without patents are less likely to go public if they operate in a market characterized by patent thickets.},
discipline={Econ},
research_type={Empirical},
industry={Software},
thicket_stance={Weak Pro},
thicket_stance_extract={Start-up software companies operating in markets characterized by denser patent thickets see their initial acquisition of VC or corporate funding delayed relative to firms in markets less affected by patents. This effect does not appear to be present on average once funding has been obtained and new ventures have become incumbents. If anything, our market-level estimates of the conditional correlation between the number of IPOs in a market and the patents in force there suggest that firms operating in markets with a large number of patents may be more attractive to investors in public markets, stimulating IPO activity and thus the payoff to early-stage investors.},
thicket_def={#A-ST, #B1-ST, Quotes Shapiro, References Shapiro, Broad Patents, Dubious Patents, Overlapping Patents, Cummulative Invention, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism},
thicket_def_extract={With more than 100,000 software patents issued in the US since 1990, and ever-greater complexity and scale of software products, industry participants face an increasingly forbidding “thicket” of IP. With even quite modest products containing millions of lines of code and thousands or tens of thousand of inter-related component modules, any of which could potentially infringe one or more patents, the cost of “clearing” new products for potential infringement can be very large. Allegedly poor standards of patent examination in this area in the past may also have generated large numbers of patents with inadequate disclosure, and excessively broad claims, raising the costs of determining the scope of existing IP, and increasing uncertainty about possible future litigation from competitors and non-competitors alike... a patent “thicket”—i.e. a “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology”... Following Hall and Ziedonis (2003) and Ziedonis (2005), we hypothesize that start-up companies with patents will be able to use them in cross-licensing negotiations to defend themselves against litigation. These patents may then act to reduce the transaction costs associated with operating in a “thicketed” market... However, it may not be just the absolute number of patents in an area that can deter entry, but also the extent to which those patents form a “thicket” in the sense of generating transactions costs above and beyond simple blocking power. As Shapiro (2001) puts it, “a patent thicket is a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology. With cumulative innovation and multiple blocking patents, stronger patent rights can thus have the perverse effect of stifling, not encouraging, innovation.”14 Ziedonis (2004) and Noel and Schankerman (2006) argue that a key factor driving transactions costs may be the degree to which ownership of patent rights is fragmented. Suppose a prospective entrant were to obtain licenses from holders of blocking patents.},
tags={#Core Paper},
filename={Cockburn MacGarvie (2009) - Patents Thickets And The Financing Of Early Stage Firms.pdf}
}
@article{cockburn2010patent,
title={Patent thickets, licensing and innovative performance},
author={Cockburn, I.M. and MacGarvie, M.J. and M{\"u}ller, E.},
journal={Industrial and Corporate Change},
volume={19},
number={3},
pages={899--925},
year={2010},
abstract={We examine the relationship between fragmented intellectual property (IP) rights and the innovative performance of firms, taking into consideration the role played by in-licensing of IP. We find that firms facing more fragmented IP landscapes have a higher probability of in-licensing. We observe a negative relationship between IP fragmentation and innovative performance, but only for firms that engage in in-licensing. In contrast, greater IP fragmentation is associated with higher innovative performance for firms that do not in-license. Furthermore, the effects of fragmentation on innovation also appear to depend on the size of a firm’s patent portfolio. These results suggest that the effects of fragmentation of upstream IP rights are not uniform, and instead vary according to the characteristics of the downstream firm.},
discipline={Econ},
research_type={Empirical},
industry={Manufacturing},
thicket_stance={Weak Anti},
thicket_stance_extract={While businesses, economists and policy-makers arguably have a relatively clear understanding of the private benefits of patents to the firms that hold them, as well as the more general benefits of the innovative activity patents help stimulate, we still lack a complete picture of the possible negative externalities associated with patent thickets. In particular there is to date little evidence on which types of firms are most affected, and this article helps fill this gap in our understanding. Perhaps our most salient findings are those about the effects of IP fragmentation on in-licensing firms with small patent portfolios, many of whom are young, small firms. Entrepreneurial firms are an important source of innovation and a driver of economic growth, and it is thus important from a policy perspective to know whether patent thickets are particularly pernicious for these firms. However, it is striking that we do not observe any significant negative correlation between fragmentation and innovative sales more generally, and we even estimate a positive correlation between fragmentation and innovative sales among firms that do not in-license. This heterogeneity in the estimated effects of fragmentation suggests that there is no straightforward, uniform relationship between patent thickets and innovation for all firms. This latter finding suggests the need for further research on the potentially varying impacts of patent thickets.},
thicket_def={Overlapping Patents, Cummulative Invention, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism},
thicket_def_extract={#A-T, A debate has also emerged over the extent to which patent “thickets” may stifle innovation. Defined by Shapiro (2001) as “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology”, patent thickets may raise transactions costs associated with contracting around existing patents to the point at which the costs associated with patents may outweigh any positive impact on R&D incentives. The potential for patent thickets to stifle innovation depends on the extent to which they raise the costs of innovators. In general, patents held by one firm are likely to impose some costs on other innovators, such as incremental R&D expenditures to design around patents, or licensing fees paid for rights to use patented technology. Where there is a patent “thicket” these costs may be large enough to materially impact incentives to innovate, and in the extreme case, an “impenetrable” patent thicket may completely block inventors from accessing some technologies, or make it prohibitively costly to bring improvements to market. These situations are thought to be most likely to occur where innovation is strongly cumulative, or products are highly complex (in the sense of containing many different independently patented components), so that there are potentially multiple blocking patents that an innovator would have to work around or gain access to.},
tags={#Core Paper},
filename={Cockburn MacGarvie Muller (2010) - Patent Thickets Licensing And Innovative Performance.pdf}
}
@misc{entezarkheir2010patent,
title={Patent Thickets and Market Value: An Empirical Analysis},
author={Entezarkheir, M.},
year={2010},
abstract={The pro-patent shift of the United States has created a patent thicket. This has made the use of other firms’ innovations more costly, due to higher transaction costs and the possibility of hold up. Using a panel data on publicly traded US manufacturing firms from 1979 to 1996, this study finds a negative impact from the patent thicket on the market value of the firm. I also find that firms with larger patent portfolios experience a smaller effect, likely because stronger bargaining position lowers the occurrence of the hold-up problem for these firms. The advantage of larger firms is even more prominent following the pro-patent shift. My results also capture heterogeneity in the impact of the patent thicket across industries.},
discipline={Mgmt},
research_type={Empirical},
industry={Manufacturing},
thicket_stance={Weak Pro},
thicket_stance_extract={The pro-patent shift of the United States has created a patent thicket... My results show that firms experience a significant decline in their market value when the technology market is fragmented. The results also show that the pro-patent shift in the 1980s has increased the size of this impact. I also find that firms with larger patent portfolios experience a smaller negative premium in their market value. This is likely because firms with larger patent portfolios face fewer problems in their cross-licensing negotiations with external entities as the larger portfolio size increases their bargaining power in the licensing negotiations and lowers the risk of being held-up by their rivals... My results also show that the negative impact of the patent thicket varies across industries. For example, the impact is insignificant in the pharmaceutical sector, but significant in the chemical and mechanical sectors.},
thicket_def={#A-T, Overlapping Patents, Cummulative Invention, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up, Unspecified Blocking Mechanism},
thicket_def_extract={I study how the fragmentation of the ownership of complementary patents impacts the market value of the firm. This fragmentation builds a patent thicket, which contains a set of overlapping patents.3 The patent thicket requires obtaining permission from several right holders to commercialize a product. Firms that face a fragmented technology market have to pay higher transaction costs and royalty payments to license external patents, because they are confronted with larger number of entities in the thicket. They are more prone to opportunistic behaviour by external entities, since the likelihood of infringing other firms’ patents is high. They are also more exposed to the risk of being litigated against by other patent holders. The patent thickets hold several costs for the firms with cumulative innovations. They cause the “complement problem” which was first formally examined by Cournot (1838).12 Shapiro (2001) extends the Cournot idea into the context of intellectual property. He indicates right holders in the thicket make the prices of invented products much larger than their marginal costs by imposing the licensing fees. The result is lower consumer welfare and joint profit of right holders. Heller and Eisenberg (1998) also show that the licensing fees in the thicket lead to underinvestment in innovation or the “tragedy of anti-commons.” Furthermore, Shapiro (2001) shows that the dense thickets increase the transaction costs of firms, because identifying complementary patents is harder and more costly. Innovators usually find about all of the patents after bearing sunk costs. This means the innovator is faced with a hold-up problem.},
tags={#Core Paper},
filename={Entezarkheir (2010) - Patent Thickets And Market Value An Empirical Analysis.pdf}
}
@article{epo2013workshop,
title={Workshop on Patent Thickets},
author={EPC, Economic and Scientific Advisory Board},
journal={European Patent Office Recommendations, Available at http://www.epo.org/news-issues/news/2013/20130313.html},
year={2013},
abstract={This report represents the summary and synthesis of the ESAB workshop on patent thickets that was held on 26 September 2012 in Leuven, Belgium. This was the third workshop in a series held in 2012, comprising the role and structure of fees, patent quality, and patent thickets. Separate reports were produced for each topic. The workshop on patent thickets was designed to (1) encourage the exchange of thoughts from different stakeholders and discover their perceptions of patent thickets; (2) ponder sectoral differences, both in incidence and impact; (3) suggest ideas for future research; and (4) suggest possible institutional approaches to address challenges raised by the existence of patent thickets and the implications of those approaches for different stakeholders. Other important considerations were the role of standards, royalty stacking, compulsory licensing, and patent pools. Early discussions centred around the definition and incidence of patent thickets and there was widespread agreement on what the term represents. A patent thicket conjures up the image of a bramble, a large dense bush with thorns on the branches making it difficult to pass through without getting severely scratched. Thus a patent thicket usually involves (1) multiple patents on (2) the same, similar, or complementary technologies, (3) held by different parties, making it difficult to negotiate intellectual property rights (for example, licensing agreements) to the point where some scholars feel it might be socially inefficient.},
discipline={Policy Report},
research_type={Discussion},
industry={General},
thicket_stance={Weak Anti},
thicket_stance_extract={The final plenary session was designed to reach conclusions about patent thickets. There was extensive debate about whether patent thickets are a problem per se, and the experts could not agree on that issue. Generally speaking, industry-based experts were less concerned about patent thickets as an insurmountable problem than experts from other organisations. However, everyone was able to agree that managing patent thickets appears to be part of a broader discussion about managing innovation and complexity, and that successful firms need to develop multi-dimensional strategies to cope with complexity. All breakout groups independently and in plenary agreed that patent thickets are a natural outcome (or symptom) of the other aspects of the current system and that there is no way to reduce the incidence of patent thickets in a vacuum. It was suggested that there is no "patent thicket" problem as such.},
thicket_def={#A-T, #B, Quotes Shapiro, References Shapiro, References Heller/Eisenberg, Complementary Inputs, Diversely-Held, Transaction Costs, Overlapping Patents},
thicket_def_extract={Thus a patent thicket usually involves (1) multiple patents on (2) the same, similar, or complementary technologies, (3) held by different parties, making it difficult to negotiate intellectual property rights (for example, licensing agreements) to the point where some scholars feel it might be socially inefficient.... What is a patent thicket? A patent thicket conjures up the image of a thicket, or bramble, a large dense bush with thorns on the branches making it difficult to pass through without getting severely scratched. Thus a patent thicket is a “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology” (Shapiro, 2001, p. 120). This makes it difficult to negotiate intellectual property rights (for example, licensing agreements1), to the point where some observers feel it might be socially inefficient (Bessen & Meurer, 2008b; Scotchmer, 1996). In such a situation, it is argued that strategic uses of the patent system by applicants may be interfering with one of the goals of the system, by obliging innovators to spend inordinate resources on transaction costs to bring new technology that builds on prior work to market. Such high transaction costs, if and when they exist, would tend to discourage innovation rather than encourage it.},
tags={#Core Paper},
filename={EPO (2012) - Workshop on Patent Thickets.pdf}
}
@article{epstein2004there,
title={Is there a biomedical anticommons},
author={Epstein, Richard A and Kuhlik, Bruce N},
journal={Regulation},
volume={27},
pages={54},
year={2004},
abstract={Six years ago in science, michael heller and Rebecca Eisenberg asked the disarmingly simple question whether patent protection could deter biomedical research. They treated patent protection as a two-edged sword: Happily, it spurs innovation by securing to inventors the fruits of their labors but, unhappily, it also creates a vast thicket that gives each patent holder a potential veto right over the innovations of others. They dubbed that potentially dangerous veto right “the tragedy of the anticommons.” According to Heller and Eisenberg, that tragedy occurs when property rights are too strong and too many people can block some productive venture. The extent of the anticommons is highly disputed with respect to intellectual property. But, without question, it arises in other contexts. One notable example is sequential monopolists, e.g., toll stations on a river that are operated by rival princes. Because of the multiple tolling, traffic along the river would be sharply reduced, thereby decreasing social welfare by reducing profits for the toll operators and travelers alike. Heller and Eisenberg’s clear implication for patent law is that inventive activity could be reduced as well, as the blocking power of patents stymies innovation by product users. As with the waterways, the total value of the resources under patents (if not the number of patents themselves) should diminish as productive avenues for research cannot be pursued by individuals who are cut off from the nourishment that their own inventive efforts obtain from a rich public domain. The pursuit of private gain leads to a loss of social welfare. Heller and Eisenberg supplied little, if any, empirical evidence for their assertion that the patent blockade dominates patent innovation. Even so, we have witnessed a persistent hue and cry for the weakening of patent protection. In the United Kingdom, the recent Needham Commission Report for the Royal Society decried the expansion of patent activities within university. Closer to home, Congress and the Food and Drug Administration have heard calls for weakening the patent protection supplied under the Hatch-Waxman Amendments to the basic patent and food and drug laws, which govern the relationship between holders of pharmaceutical patents and their eventual generic competitors.},
discipline={Law},
research_type={Discussion},
industry={Biotech, Pharma},
thicket_stance={Anti},
thicket_stance_extract={We think that Heller and Eisenberg have overstated the case against patent protection at both the theoretical and empirical levels.},
thicket_def={#A, #B},
thicket_def_extract={They dubbed that potentially dangerous veto right “the tragedy of the anticommons.” According to Heller and Eisenberg, that tragedy occurs when property rights are too strong and too many people can block some productive venture.... One reason why the Heller and Eisenberg model fails is that it is based, we believe, on a set of faulty analogies. Above, we instanced the blocking power that exists whenever multiple owners control different segments of a river. In that instance, nature supplies an effect i ve barr ier against any form of innovation that could offer new routes to travel along the river.},
tags={#Core Paper},
filename={Epstein Kuhlik (2004) - Is There A Biomedical Anticommons.pdf}
}
@article{evans2004software,
title={Software patents and open source: the battle over intellectual property rights},
author={Evans, D.S. and Layne-Farrar, A.},
journal={Va. JL \& Tech.},
volume={9},
pages={10--13},
year={2004},
abstract={In the wake of a series of court cases extending patents to software, open-source software proponents have proposed a number of arguments for limiting or even eliminating software patents. In particular, they claim that the U.S. Patent and Trademark Office (USPTO) has done a poor job of reviewing software patent applications, resulting in obvious, trivial patents. Open-source proponents also maintain that software patents hinder the standards-setting process important for high-technology industries, and that patents will lead to intellectual property rights “thickets” that slow down or stop the innovative process in the software industry. We evaluate these claims, examining relevant empirical evidence where available. While it is clear that problems exist with the patent-granting process, they do not rise to the level of justifying a ban on software patents. Instead, other reasonable––and far less drastic––measures are available. The USPTO has already begun reforms that should improve its software patent-review process. As for patent thickets, theory suggests they could form in the software industry, but empirical evidence suggests that in fact this has not occurred. Moreover, tools such as patent pools and cross-licensing can increase innovation sharing and are available to limit the development of thickets. While the academic literature is still debating the link between patents and innovation, patents have been shown to have some positive effects, including increased venture capital funding for small firms. In the end, reform is far more attractive than abolition, because it retains the good while minimizing the bad.},
discipline={Mgmt},
research_type={Discussion},
industry={Software},
thicket_stance={Weak Anti},
thicket_stance_extract={Evidence does not support the argument that patents simply are not needed to spur innovation, or that patents block future innovation by causing non-negotiable thickets of rights and reducing the software commons. Arguments like these are based largely on theory with a smattering of anecdotes thrown in, rather than on hard empirical evidence.},
thicket_def={#A, #B, References Shapiro, References Heller/Eisenberg, Cummulative Invention, Strategic Patenting (Bad), Unspecified Blocking Mechanism},
thicket_def_extract={The theoretical economics literature argues that when innovations are sequential and cumulative, patents may impose more than the typical exclusion-period costs.113 For instance, a patent for an invention early in the innovative process could impose a toll on each sequential innovation that relies on it. Subsequent inventors, therefore, face higher transaction costs––they must pay licensing fees before they can further refine a technology. As the tolls build during the technology’s development path, later research could be discouraged altogether. Alluding to the famous argument for property rights, over-patenting has been dubbed the “tragedy of the anticommons,” as too many people with exclusionary rights can cause underutilization of resources.114 Shapiro uses another metaphor: the patent thicket... Based on the theoretical literature, software patent opponents claim that patent thickets will develop in the software industry. Thus, they assert that patents allow a company or individual to prevent the type of incremental innovation that is so important in the software industry. When small pieces of software that are adaptable to a multitude of applications can be and are patented, it becomes increasingly likely that each complex program will infringe someone’s patent. Therefore, opponents argue that developers have incentives to “over-patent” for strategic or defensive reasons in order to gain leverage in cross-licensing negotiations.119 Strategic patenting results in a patent thicket, an impenetrable barrier to further innovation.},
tags={#Core Paper},
filename={Evans LayneFarrar (2004) - Software Patents And Open Source.pdf}
}
@article{farrell2009intellectual,
title = {Intellectual Property as a Bargaining Environment},
author = {Farrell, Joseph},
journal = {Innovation Policy and the Economy},
volume = {9},
number = {1},
pages = {pp. 39-53},
abstract = {Executive Summary Intellectual property policy relies on bargaining in the shadow of exclusivity. But bargaining is generically less than fully efficient, and the bargaining that would be needed to reach efficient arrangements in the shadow of exclusivity may be especially difficult in certain ways. I explore these issues and illustrate with brief discussions of patent pools and standards organizations, among others.},
year = {2009},
publisher = {The University of Chicago Press},
copyright = {Copyright © 2009 The National Bureau of Economic Research},
discipline={Econ},
research_type={Discussion},
industry={General},
thicket_stance={Assumed Pro},
thicket_stance_extract={One might call this a “potential-patent thicket,” as distinct from the “actual-patent thicket” that can create multiple-marginalization problems when many patents are known to be infringed by a product.},
thicket_def={Complementary Inputs, Diversely-Held},
thicket_def_extract={#A, One common and intuitively difficult information problem arises when a producer does not know with whom it must negotiate concerning patents. One might call this a “potential-patent thicket,” as distinct from the “actual-patent thicket” that can create multiple-marginalization problems when many patents are known to be infringed by a product.},
tags={#Core Paper, SSO, Patent Pools, Cross-licensing},
filename={Farrell (2009) - Intellectual Property As A Bargaining Environment.pdf}
}
@article{galasso2007broad,
title={Broad Cross-license Agreements and Persuasive Patent Litigation: Theory and Evidence from the Semiconductor Industry},
author={Galasso, A.},
journal={LSE STICERD Research Paper No. EI45},
year={2007},
abstract={In many industries broad cross-license agreements are considered a useful method to obtain freedom to operate and to avoid patent litigation. In this paper I study the previously neglected dynamic trade-off between litigating and cross-licensing that firms face to protect their intellectual property. I present a model of bargaining with learning in which firms’ decisions to litigate or crosslicense depend on their investments in technology specific assets. In particular the model predicts that where firms’ sunk costs are higher, their incentive to litigate and delay a cross-license agreement is lower. In addition, the bargaining game shows how firms with intermediate values of asset specificity tend to engage in inefficient "persuasive litigation". Using a novel dataset on the US semiconductor industry I obtain empirical results consistent with those suggested by the model. Combining model intuition with some empirical figures, I evaluate possible effects of the currently debated patent litigation reform.},
discipline={Econ},
research_type={Theory, Empirical},
industry={General, Semiconductor},
thicket_stance={Assumed Pro},
thicket_stance_extract={In particular, Shapiro (2001) has argued that a "patent thicket" has appeared that renders it difficult to commercialize a new technology. In some industries the number of intellectual property rights a firm requires to produce a new product is so large, and their ownership is so dispersed, that it is quite easy to unintentionally infringe on a patent. In this environment there is, therefore, a hold-up problem: when the manufacturer starts selling its product a patentee might show up threatening to shut production down unless it is paid high royalties.},
thicket_def={#A-S, References Shapiro, Unspecified Blocking Mechanism, Diversely-Held, Hold-up},
thicket_def_extract={In particular, Shapiro (2001) has argued that a "patent thicket" has appeared that renders it difficult to commercialize a new technology. In some industries the number of intellectual property rights a firm requires to produce a new product is so large, and their ownership is so dispersed, that it is quite easy to unintentionally infringe on a patent. In this environment there is, therefore, a hold-up problem: when the manufacturer starts selling its product a patentee might show up threatening to shut production down unless it is paid high royalties.},
tags={#Core Paper, Private Mechanisms, Cross-licensing, Litigation},
filename={Galasso (2007) - Broad Cross License Agreements And Persuasive Patent Litigation.pdf}
}
@article{galasso2010patent,
title={Patent thickets, courts, and the market for innovation},
author={Galasso, A. and Schankerman, M.},
journal={The RAND journal of economics},
volume={41},
number={3},
pages={472--503},
year={2010},
abstract={We study how fragmentation of patent rights (‘patent thickets’) and the formation of the Court of Appeal for the Federal Circuit (CAFC) affected the duration of patent disputes, and thus the speed of technology diffusion through licensing. We develop a model of patent litigation which predicts faster settlement agreements when patent rights are fragmented and when there is less uncertainty about court outcomes, as was associated with the ‘pro-patent shift’ of the CAFC. The model also predicts that the impact of fragmentation on settlement duration should be smaller under the CAFC. We confirm these predictions empirically using a dataset that covers nearly all patent suits in U.S. federal district courts during the period 1975-2000. Finally, we analyze how fragmentation affects total settlement delay, taking into account both reduction in duration per dispute and the increase in the number of required patent negotiations associated with patent thickets.},
discipline={Econ},
research_type={Empirical},
industry={General},
thicket_stance={Anti},
thicket_stance_extract={This paper investigates how patent thickets and the formation of the Court of Appeal for the Federal Circuit affect the duration of patent disputes, and thus the speed of technology diffusion through licensing... There are two main empirical findings. First, patent disputes in U.S. district courts are settled more quickly when infringers require access to fragmented external rights, but this effect is much weaker after the introduction of the CAFC. Second, the introduction of the CAFC is associated with a direct and large reduction on the duration of disputes, which the model attributes to less uncertainty about the outcome if the dispute goes to trial.},
thicket_def={#A, #B, Diversely-Held, Complementary Inputs, Overlapping Patents.},
thicket_def_extract={We study how fragmentation of patent rights (‘patent thickets’)... This allows us to summarize the relationship between fragmentation, complementarity and the expected settlement time in the following proposition: H2: Settlement negotiations will be longer for patents that have fewer substitutes (i.e., greater complementarity},
tags={#Core Paper},
filename={Galasso Schankerman (2010) - Patent Thickets Courts And The Market For Innovation.pdf}
}
@article{george2006hiding,
title={What Is Hiding in the Bushes-Ebay's Effect on Holdout Behavior in Patent Thickets},
author={George, G.D.},
journal={Mich. Telecomm. \& Tech. L. Rev.},
volume={13},
pages={557},
year={2006},
abstract={},
discipline={Law},
research_type={Discussion},
industry={General},
thicket_stance={Assumed Pro},
thicket_stance_extract={Inside patent thickets, eBay’s tendency to create either a de facto public domain or patent-collecting organizations with strong market power offers two potential solutions to the “anticommons” problem. However, these solutions are not without their own drawbacks, and it is still unclear whether eBay leads to improved efficiency in the use of innovations in areas of technology covered by patent thickets. Even though eBay mitigates the costs associated with a failure to license, it also exposes the weakness of a patent system un-enforced by automatic injunctions or prone to abuse by patent cartels.},
thicket_def={Overlapping Patents, Complementary Inputs, Diversely-Held, Transaction Costs},
thicket_def_extract={#A, #B, Many areas of technology are subject to numerous overlapping patent rights, or a “patent thicket.”1 A patent thicket exists where there are numerous different firms holding patents that are legally and technologically distinct, but overlap to cover a much smaller number of actual or potential commercial products... Property law and patent law scholars have recently noticed that patent thickets have the potential to trigger a “tragedy of the anticommons,”5 with so many patent holders in a given area that it is too difficult to secure all of the necessary licenses to use the technology.},
tags={#Core Paper},
filename={George (2006) - What Is Hiding In The Bushes Ebays Effect On Holdout Behavior In Patent Thickets.pdf}
}
@article{geradin2007royalty,
title={Royalty stacking in high tech industries: separating myth from reality},
author={Geradin, D. and Layne-Farrar, A. and Padilla Blanco, A.},
year={2007},
abstract={A few recent contributions to the literature have claimed that in high-tech industries -- where innovation is often cumulative and products include many components protected by patents held by many different patent holders – the cost of obtaining all necessary licenses is too high. Some have even requested sweeping policy reforms to deal with the so-called royalty stacking problem. In this Essay we find that the empirical evidence – including new evidence for 3G telecom – does not corroborate the gloomy predictions of the proponents of the royalty stacking hypothesis. A careful look at the theoretical underpinnings of this hypothesis explains the lack of empirical support. First, three necessary conditions must be satisfied for a royalty stacking problem to exist: (a) innovation must be cumulative, so that the patents are complementary; (b) there must be many patents for a given product; and (c) the many patents must be held by numerous, distinct rights holders. Buy royalty stacking may not be a problem even if the three necessary conditions are met; i.e., the three conditions are necessary but not sufficient. Moreover, several market mechanisms, such as cross licensing or voluntary patent pools, can be used to mitigate the costs of multiple concurrent patent negotiations. We conclude that the so-called royalty stacking problem is more myth than reality and that there is no reason to adopt the dramatic reforms in antitrust and patent law that have been recently proposed.},
discipline={Econ},
research_type={Empirical},
industry={General},
thicket_stance={Neutral},
thicket_stance_extract={The empirical and theoretical results of this Essay seriously question the underpinnings of recent proposals advocating various changes in antitrust enforcement and patent law, which are meant to address the purported tragedy of the anti-commons and the misfortunes caused by ever growing patent thickets.},
thicket_def={#A-T, #B-T, References Shapiro, References Heller/Eisenberg, Cummulative Invention, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up},
thicket_def_extract={One of the earliest applications of the cumulative and sequential innovation theory was aimed at biotechnology research... In 2001, Shapiro pronounced the existence of a “patent thicket” in “several key industries”... Nonetheless, Shapiro does not present any evidence on licensing difficulties or holdup within the semiconductor or telecom industries... One of the key distinctions for the anti-commons theory as applied to standard setting lies in the timing of licensing negotiations. For those technologies that are easy to invent around, “the patented technology contributes little if anything to the final product, and any ‘reasonable’ royalty would be modest at best.”38 But Shapiro and others argue that after the technology is included in a standard or after potential licensees have started manufacturing, the patent holder “can credibly seek far greater royalties, very likely backed up with the threat of shutting down the manufacturer…” Shapiro sees little relief for this ex post hold-up aspect of patent thickets short of reforming patent law... Based on patent thicket and anti-commons theory, along with insights from transaction cost theory, Ziedonis predicted that firms would patent more aggressively than expected when the rights to the technology are highly fragmented},
tags={#Core Paper},
filename={Geradin (2007) - Royalty Stacking In High Tech Industries Separating Myth From Reality.pdf}
}
@article{geradin2008complements,
title={The complements problem within standard setting: assessing the evidence on royalty stacking},
author={Geradin, D. and Layne-Farrar, A. and Padilla Blanco, A.},
journal={Boston University Journal of Science and Technology Law, Vol. 14, No. 2, 2008},
year={2008},
abstract={Royalty stacking, the most recent incarnation of the complements problem identified in the early 1800s by French engineer Augustine Cournot, has received considerable attention. The potential for royalty stacking within standard setting efforts arises from the fact that downstream manufacturing companies can face multiple upstream gatekeepers, each of whom must grant a license to their “essential” patents before the downstream firms can legally commercialize the standard. Some authors have claimed that in high-tech industries—which are frequently characterized by cumulative innovation, dispersed ownership of patents, and cooperative standard setting efforts—the cost of obtaining all necessary licenses is too high, such that innovation has been thwarted and consumers have been harmed. In this paper, we assess the case for royalty stacking within standards and find the evidentiary support weak at best. We note that the relevant question is not whether royalty stacking is possible, as the theoretical arguments behind it have withstood the test of time, but whether it is common enough and costly enough in actuality to warrant policy changes. The available evidence suggests not, implying that any policy changes aimed at solving royalty stacking are likely to cause more (unintended) harm than they cure.},
discipline={Econ},
research_type={Discussion},
industry={Semiconductor, Software, Biotech},
thicket_stance={Assumed Pro},
thicket_stance_extract={The articles that attached the “anti-commons” label to this “stunting effect” came several years later.},
thicket_def={#A, References Shapiro, References Heller/Eisenberg, Complementary Inputs, Diversely-Held, Transaction Costs, Overlapping Patents, Cummulative Invention, Unspecified Blocking Mechanism},
thicket_def_extract={Relying on this logic, some authors have claimed that in high-tech industries—which are frequently characterized by cumulative innovation and dispersed ownership of patents—the cost of obtaining all necessary licenses is too high, such that innovation has been thwarted and consumers have been harmed.6... In an article evaluating the National Institute of Health’s (NIH) proposal to patent products resulting from sequencing the human genome, Kiley (1992) argued “[b]ecause every step along the way draws another patent application, the path toward public possession of real benefit is increasingly obscured by dense thickets of intersecting, overlapping, and cross-blocking patents . . . The cumulation of royalty obligations threatens to have [a stunting] effect in biotechnology.”... Shapiro (2001) applies the concern expressed by Kiley over “dense thickets of intersecting, overlapping, and cross-blocking patents” to high technology industries more frequently involved in standard setting.28 In particular, Shapiro argues that “[t]he need to navigate the patent thicket and holdup is especially pronounced in industries such as telecommunications and computing in which formal standard setting is a core part of bringing new technologies to market.”29... Referring to “Cournot’s lessons”, Shapiro presents a number of “unattractive consequences” resulting from “multiple patent burdens.”31 Namely, he argues that a complements problem would not only reduce consumer welfare, it also would lower the profits of patent holders, as compared to a coordinated licensing approach; it can result in market collapse if production is subject to economies of scale; and it “necessarily reduces the return to new product design and development, and thus can easily be a drag on innovation and commercialization of new technologies.”},
tags={#Core Paper},
filename={Geradin LayneFarrar PadillaBlanco (2008) - The Complements Problem Within Standard Setting.pdf}
}
@article{hall2001patent,
title={The patent paradox revisited: an empirical study of patenting in the US semiconductor industry, 1979-1995},
author={Hall, B.H. and Ziedonis, R.H.},
journal={RAND Journal of Economics},
pages={101--128},
year={2001},
abstract={We examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation. Recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to R&D. Yet the propensity of semiconductor firms to patent has risen dramatically since the mid- 1980s. We explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 U.S. semiconductor firms during 1979-1995. The results suggest that the 1980s strengthening of U.S. patent rights spawned "patent portfolio races" among capital-intensive firms, but it also facilitated entry by specialized design firms.},
discipline={Econ},
research_type={Theory, Empirical},
industry={Semiconductor},
thicket_stance={Assumed Pro},
thicket_stance_extract={If patent rights were strictly awarded to inventors of "nonobvious," "useful," and "novel" inventions, then it should become increasingly difficult to obtain a patent when a thicket of prior art exists, and the number of successful patent applications should fall.},
thicket_def={#A, #B, Diversely-Held, Overlapping Patents, Cummulative Invention, Unspecified Blocking Mechanism (Not DHCI), Strategic Patenting (Bad)},
thicket_def_extract={The semiconductor industry also provides an excellent setting within which to examine the effects of stronger patent rights on firms engaged in rapidly advancing, "cumulative" technologies. Much like multimedia or computer firms, semiconductor firms often require access to a "thicket" of intellectual property rights in order to advance the technology or to legally produce or sell their products. Given the rapid pace of technological change in this industry, however, any new product or process is likely to overlap with technologies previously or simultaneously developed by external parties (Grindley and Teece, 1997)... This concern appears especially salient among firms that have made costly and rapidly depreciating investments in facilities that use a "thicket" of innovations developed by many parties. To obtain the rights to infringe patents held by external parties and to improve their leverage in negotiations with other patent owners, these firms amass larger patent portfolios of their own with which to trade... If patent rights were strictly awarded to inventors of "nonobvious," "useful," and "novel" inventions, then it should become increasingly difficult to obtain a patent when a thicket of prior art exists, and the number of successful patent applications should fall.},
tags={#Core Paper},
filename={Hall Ziedonis (2001) - The Patent Paradox Revisited.pdf}
}
@article{hall2012study,
title={A Study of Patent Thickets},
author={Hall, B.H. and Helmers, C. and von Graevenitz, G. and Rosazza-Bondibene, C.},
journal={Draft Report to the UK IPO},
pages={1--66},
year={2012},
abstract={},
discipline={Policy Report},
research_type={Empirical},
industry={General},
thicket_stance={Pro},
thicket_stance_extract={We find overwhelming evidence in the literature that patent thickets arise in specific technology areas.},
thicket_def={#A, #B, Broad Patents, Overlapping Patents, Cummulative Invention, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism},
thicket_def_extract={A patent thicket is “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology” (Shapiro, 2000). Patent thickets consist of patents that protect components of a modular and complex technology. Here modular means that different sets of components can be assembled to yield a variety of technological products. Complex means that products consist of tens or hundreds of such modular components. Each component may end up being used in several products. Often there are partial or complete overlaps in the functionality of components and then the patents protecting the components may also overlap. If overlapping patents belong to different firms, then a patent thicket exists. Although technology areas with large number of patents often lead to patent thickets, this is not necessarily the case. In principle, an active technology area could have a large number of patents, each clearly delineating the invention concerned and none with overlapping claims or claims with uncertain breadth or scope. Thus it is important not to use numbers of patents as an indicator of patent thickets. Nevertheless, it is undoubtedly the case that one of implications of the presence of patent thickets is active patenting in the sector, so the two phenomena are correlated. Later in this report, we propose a measure of thickets in a technology area that incorporates an indicator of complexity and the possibility of overlapping claims, and controls for the overall level of patenting in the area.},
tags={#Core Paper},
filename={Hall (2012) - A Study Of Patent Thickets.pdf}
}
@article{hall2007empirical,
title={An empirical analysis of patent litigation in the semiconductor industry},
author={Hall, Bronwyn H and Ziedonis, Rosemarie},
journal={University of California at Berkeley working paper},
year={2007},
publisher={Citeseer},
abstract={Semiconductor firms sell products that embed hundreds if not thousands of patented inventions, elevating concerns about patent-related hold-up in this sector. This paper examines the incidence and nature of patent lawsuits involving 136 dedicated U.S. semiconductor firms between 1973 and 2001. By supplementing patent litigation data with information drawn from archival sources, we estimate the probability that firms will be involved in patent lawsuits, either as enforcers of exclusionary rights or as targets of litigation filed by other patent owners. We further distinguish between disputes that involve product-market rivals and those that do not. Overall, we find little evidence that semiconductor firms have adopted a more aggressive stance towards patent enforcement since the 1970s, despite the effective strengthening of U.S. patent rights in the 1980s and widespread entry by small firms. In fact, their litigation rate as enforcers of patents remains relatively stable over the past two decades once we control for factors such as the number of patents they own and changes in R&D spending. In striking contrast, we find an escalation in their baseline risk as targets of litigation brought by outside patent owners.},
discipline={Econ},
research_type={Empirical, Discussion},
industry={Semiconductor},
thicket_stance={Assumed Pro},
thicket_stance_extract={The conclusion is that semiconductor firms behave like other firms in thickets industries with respect to their own litigation, but compared to other thickets industries, as targets their size and their large sunk technology costs make them look more like firms in chemicals.},
thicket_def={#A, Complementary Inputs, Diversely-Held, Hold-up},
thicket_def_extract={If there is an “innovation tax” arising from patents, it is expected to be especially salient in sectors where products are complex and combine many patentable technologies that may be owned by a number of different parties. As suggested by a number of researchers (e.g., see Grindley and Teece 1997) and as shown by Arora et al. (2003), Information and Communication Technology (ICT) sectors, including semiconductors, are likely to fall in this class of sectors. Such firms typically require access to a “thicket” of external intellectual property to advance technology or to legally manufacture and sell products, elevating concerns about patent-related hold-up problems.},
tags={},
filename={Hall Ziedonis (2007) - An Empirical Analysis Of Patent Litigation In The Semiconductor Industry.pdf}
}
@article{hargreaves2011digital,
title={Digital opportunity: a review of intellectual property and growth: an independent report},
author={Hargreaves, I.},
year={2011},
abstract={Intellectual Property is important to growth... In advanced economies like the UK’s, innovation is crucial to competitive edge. That makes Intellectual Property (IP) policy an increasingly important tool for stimulating economic growth. Every year in the last decade, investment by UK business in intangible assets has outstripped investment in tangible assets: by £137 billion to £104 billion in 2008. Global trade in IP licences alone is worth more than £600 billion a year: five per cent of world trade and rising. Small and young innovative firms are of crucial importance in terms of growth and jobs but proliferating use of IP rights can push up IP transaction costs and block these new players from entering markets. The IP framework is falling behind and must adapt... IP law must adapt to change. Digital communications technology involves routine copying of text, images and data, meaning that copyright law has started to act as a regulatory barrier to the creation of certain kinds of new, internet based businesses. With two thirds of the world’s population yet to achieve direct connection to the internet, this digital revolution has by no means run its course (Chapter 1). The Prime Minister asked the Review to consider whether our IP framework needs to adapt in the interests of encouraging innovation and growth. The Review’s conclusion is that such adaptation is required. The UK’s current IP system is falling behind what is needed, especially in the area of copyright.},
discipline={Policy Report},
research_type={Discussion},
industry={General},
thicket_stance={Assumed Pro},
thicket_stance_extract={..in this review: from the single European patent and easier copyright licensing to a better rights framework for design and steps to control patent thickets. Research undertaken by the Review also confirms that SMEs are not sufficiently well served by those providing advice and information on IPRs.},
thicket_def={#B-ST, References Shapiro, Overlapping Patents, Cummulative Invention, Diversely-Held},
thicket_def_extract={This finding may be due to the existence of patent thickets – meaning “an overlapping set of patent rights” which require innovators to reach licensing deals for multiple patents from multiple sources.12 These thickets appear to enable patent holders to exclude new and innovative firms from entering the market, thereby inhibiting growth... is causing regulatory blockage in the form of “thickets” of pre-existing patents and pending patents which impede genuine innovators wishing to enter markets... A particular danger from increasing numbers of patents is the development of “thickets” of patents with overlapping claims. The result of these is that businesses working at the leading edge of a particular technology may find it difficult or even impossible to know with whom they are in conflict, or whom they should approach for a licence.},
tags={#Core Paper},
filename={Hargreaves (2011) - Digital Opportunity.pdf}
}
@article{harhoff2012conflict,
title={Conflict Resolution, Public Goods and Patent Thickets},
author={Harhoff, D. and Von Graevenitz, G. and Wagner, S.},
journal={Public Goods and Patent Thickets (April 15, 2012)},
year={2012},
abstract={Litigation and post-grant validity challenges at patent offices provide an important mechanism for correcting erroneous patent grants. However, such challenges will only be initiated if the (expected) private gains from challenging a granted patent right exceed the respective costs. Two important aspects may influence the likelihood of challenges. First, there is a public goods problem: firms may refrain from challenges if they anticipate that others will also benefit from the revocation of a weak patent. Second, as more firms are caught up in patent thickets, challenges to weak patents will become too costly as they invite counter-challenges. We use data on opposition proceedings initiated against patents granted at the European Patent Office (EPO) to study the importance of these mechanisms. This paper identifies a significant increase in the incidence of opposition in technical fields characterized by high concentration of patent ownership. Additionally, in fields with a large number of mutually blocking patents, the incidence of opposition is sharply reduced, particularly amongst those firms that are caught up in and driving the growth of patent thickets. Thus, while post-grant reviews may help to resolve problems in some areas, they are less suited to deal with patent thickets and contexts with dispersed patent ownership. We discuss the implications of these results for efforts to deal with patent thickets and weak patents.},
discipline={Econ},
research_type={Empirical},
industry={General},
thicket_stance={Assumed Pro},
thicket_stance_extract={Additionally, in fields with a large number of mutually blocking patents, the incidence of opposition is sharply reduced, particularly amongst those firms that are caught up in and driving the growth of patent thickets. Thus, while post-grant reviews may help to resolve problems in some areas, they are less suited to deal with patent thickets and contexts with dispersed patent ownership.},
thicket_def={#B, References Shapiro, Overlapping Patents, Cummulative Invention, Unspecified Blocking Mechanism (Not DHCI), Hold-up},
thicket_def_extract={Formal models of patenting in patent thickets do not attempt to span both complex and discrete technologies as we do here... Complexity increases with the number of facets. With higher complexity it is increasingly probable that ownership of patents in a technological opportunity becomes dispersed. We assume that the value of owning patents 3 in technological opportunities with more than one facet depends on the share of patents in each technological opportunity that firms own. This captures the interdependence of patents in complex technologies and the possibility for hold-up within them.... Due to the complexity of the technology hold-up may arise: in the case of LASIK there has was a string of court cases between VISX Inc. and Nidek Inc. after 1998 regarding infringement of VISX patents on LASIK... The literature on patent thickets shows that several institutional arrangements allow firms to disentangle overlapping property rights... This is attributed to firms’ efforts to reduce potential hold-up by opportunistic patentees owning critical or blocking patent rights – a situation which is associated with the existence of patent thickets.},
tags={#Core Paper},
filename={Harhoff VonGraevenitz Wagner (2012) - Conflict Resolution Public Goods And Patent Thickets.pdf}
}
@article{harhoff2008incidence,
title={Incidence and Growth of Patent Thickets-The Impact of Technological Opportunities and Complexity},
author={Harhoff, D. and Von Graevenitz, G. and Wagner, S.},
journal={CEPR Discussion Papers},
volume={6900},
year={2008},
abstract={We investigate incidence and evolution of patent thickets. Our empirical analysis is based on a theoretical model of patenting in complex and discrete technologies. The model captures how competition for patent portfolios and complementarity of patents affect patenting incentives. We show that lower technological opportunities increase patenting incentives in complex technologies while they decrease incentives in discrete technologies. Also, more competitors increase patenting incentives in complex technologies and reduce them in discrete technologies. To test these predictions a new measure of the density of patent thickets is introduced. European patent citations are used to construct measures of fragmentation and technological opportunity. Our empirical analysis is based on a panel capturing patenting behavior of 2074 firms in 30 technology areas over 15 years. GMM estimation results confirm the predictions of our theoretical model. The results show that patent thickets exist in 9 out of 30 technology areas. We find that decreased technological opportunities are a surprisingly strong driver of patent thicket growth.},
discipline={Econ},
research_type={Empirical},
industry={General},
thicket_stance={Pro},
thicket_stance_extract={The results show that patent thickets exist in 9 out of 30 technology areas. We find that decreased technological opportunities are a surprisingly strong driver of patent thicket growth.},
thicket_def={#A-ST, #B-ST, #C1, #D, References Shapiro, Complementary Inputs, Diversely-Held, Dubious Patents, Overlapping Patents, Cummulative Invention, Transaction Costs, Always Hinders Innovation, Strategic Patenting (Bad)},
thicket_def_extract={...Complexity of a technology implies that patents are natural complements, and therefore hold-up arises easily if patent ownership is dispersed... This patenting boom is leading to problems of patent office backlogs and the emergence of so called “patent thickets”, which obstruct entry to some markets and so impede innovation. The structure of patent renewal fees might be adjusted to encourage patentees to assess more carefully the value of maintaining lower value patents, so reducing the density of patent thickets... This finding may be due to the existence of patent thickets – meaning “an overlapping set of patent rights” which require innovators to reach licensing deals for multiple patents from multiple sources.12 These thickets appear to enable patent holders to exclude new and innovative firms from entering the market, thereby inhibiting growth... These delays have led to backlogs at patent offices. Meanwhile, in some business sectors patent proliferation is causing regulatory blockage in the form of “thickets” of pre-existing patents and pending patents which impede genuine innovators wishing to enter markets... A particular danger from increasing numbers of patents is the development of “thickets” of patents with overlapping claims. The result of these is that businesses working at the leading edge of a particular technology may find it difficult or even impossible to know with whom they are in conflict, or whom they should approach for a licence... As well as added transaction costs, patent thickets encourage strategic or defensive patenting behaviour,5 particularly where there is fragmentation of IPRs into the hands of multiple owners.6 Strategic patenting behaviour occurs when firms build portfolios of patents for defensive rather than innovative purposes... Thus, although these market solutions offer ways around the thicketing problem, they bring their own difficulties, particularly for the very firms most crucial to innovation. It follows that standards setting and cross licensing pools are valuable, but not a complete answer to the growing problem of thickets and the risk of “gridlock.”... This would encourage the surrender of less valuable patents, reducing the density of thickets in a way consistent with achieving the maximum net economic benefit.},
tags={#Core Paper},
filename={Harhoff (2008) - Incidence And Growth Of Patent Thickets.pdf}
}
@article{harhoff2007strategic,
title={The strategic use of patents and its implications for enterprise and competition policies},
author={Harhoff, Dietmar and Hall, Bronwyn H and von Graevenitz, Georg and Hoisl, Karin and Wagner, Stefan and Gambardella, Alfonso and Giuri, Paola},
journal={Report commissioned by European Commission},
year={2007},
abstract={This report was commissioned as a study into the strategic use of patents. In the course of its case investigations and legislative reviews the European Commission became aware of changes in the use of intellectual property, in particular the use of patents. It was noted that firms’ uses of intellectual property are becoming increasingly strategic. This raised concerns about the implications of firms’ patenting behaviour for enterprise and competition policy. The following report contains a comprehensive review of patenting behaviour, the extent to which patenting i s becoming more strategic and the implications this has for c ompetition and enterprise policies.},
discipline={Policy Report},
research_type={Theory, Discussion},
industry={General},
thicket_stance={Pro},
thicket_stance_extract={In general the complementarity of patents i n complex technologies gives rise to greater frequency of interaction between firms. This happens when firms disentangle the patent thicket and insure themselves against hold-up through licensing or similar forms of cooperation and coordination.},
thicket_def={#A-T, References Shapiro, References Heller/Eisenberg, Complementary Inputs, Diversely-Held, Transaction Costs},
thicket_def_extract={In the field of biomedical research an early paper by Heller and Eisenberg (1998) raised serious questions regarding the effects of patenting on research productivity in this field, especially at the level of basic scientific research. they argue that patent thickets in biomedical research would make it difficult or impossible for researchers to access basic research tools. By implication research progress in these industries would be stifled. More recent work by Walsh, Arora and Cohen (2002) and Walsh, Cho and Cohen (2005) does not show that these concerns are generally valid. In the field of nanotechnology Lemley (2005) has documented that firms and universi ties are patenting at an unprecedented pace for such a new technology. He points out that this is the first new technology to emerge in which basic scientific building blocks are being patented... What unifies all of this work is its focus on patenting in technologies in which a product is based on a large number of patents, i.e., industries in which products are complex. These patents are valuable only as a set of complementary patent rights. Thus, assumption (iv) 37 of the traditional view of patents is violated. Shapiro (2001) argues that firms in industries based on such complex technologies face a growing “patent thicket”: a dense web of overlapping patents in which a firm is often faced by rivals that hold patents which may block the use of its own patents... In such cases the various patents embodied in the product become “technological complements”. Technological complementarity is one cause for overlapping patents and for the existence of blocking patents. Thus it is one precondition for the emergence of patent thickets and for the amassing of patent portfolios... It may be that the firms involved are attempting to reduce transactions costs that arise within a patent thicket.},
tags={#Core Paper, Complements, Substitutes, Fences, Strategic Patenting},
filename={Harhoff (2007) - The Strategic Use Of Patents And Its Implications For Enterprise And Competition Policies.pdf}
}
@article{hegde2009pioneering,
title={Pioneering Inventors or Thicket Builders: Which US Firms Use Continuations in Patenting?},
author={Hegde, D. and Mowery, D.C. and Graham, S.J.H.},
journal={Management Science},
volume={55},
number={7},
pages={1214--1226},
year={2009},
abstract={Why do firms use continuations in the prosecution of their patents? Motivated by the widespread use of continuations by U.S. firms and the prominence of this procedure in U.S. patent policy debates, we investigate the influence of corporate and patent characteristics on the use of continuations. We employ novel data on applicants and their filings of three types of continuations—the continuation application (CAP), the continuations in part (CIP), and divisions—during 1981–2000 to distinguish among the motives for continuing patents. We find that CIPs are disproportionately filed by research and development-intensive firms that patent heavily, and that these continuations are more common in chemical and biological technologies. Patents issuing from CIPs cover relatively important inventions and their use appears consistent with a strategy of protecting “pioneering inventions.” In contrast, CAPs and divisions are associated with less important patents assigned to capital-intensive firms, particularly in computer and semiconductor fields, and appear to be used in defensive patenting strategies. We analyze the effects of the 1995 change in patent term, and find that the act reduced continuations overall and shifted the output of continuations toward less important patents.},
discipline={Econ},
research_type={Empirical},
industry={General},
thicket_stance={Pro},
thicket_stance_extract={A high proportion of backward self-cites is another potential correlate of patenting strategies that accumulate “thickets” of patents that overlap and cite one another. We found that patents owned by Compustat firms issuing from post-1995 CAPs contained a significantly higher proportion of backward self-citations than any other group of patents, whereas CAPs prior to 1995 cited their own patents less frequently than patents issuing from any other type of continuation. This provides additional evidence on the increased use of CAPs in post-1995 strategies that involve building thickets of patents.},
thicket_def={#C, References Shapiro, Dubious Patents, Overlapping Patents, Cummulative Invention, Strategic Patenting (Bad), Hold-up},
thicket_def_extract={These lower-quality patents can be valuable to patentholders seeking to accumulate a thicket of patents for “defensive” purposes and/or to improve their bargaining position in patent cross-licensing negotiations (Shapiro 2001). Additionally, according to Lemley and Moore (2004), inventors may use the continuations procedure to increase uncertainty for rivals’ research and development (R&D) investment decisions, or to acquire so-called “submarine patents"... A patenting strategy that is consistent with the use of continuations to acquire a large number of less significant patents has been analyzed by Hall and Ziedonis (2001) in the semiconductor industry. For capital-intensive manufacturing firms, whose multibillion-dollar production facilities are at risk of shutdowns from patent-infringement injunctions, large patent portfolios can be useful in cross-licensing negotiations that reduce the risk of patent litigation.},
tags={#Core Paper},
filename={Hegde Mowery Graham (2009) - Pioneering Inventors Or Thicket Builders.pdf}
}
@article{heller1998can,
title={Can patents deter innovation? The anticommons in biomedical research},
author={Heller, M.A. and Eisenberg, R.S.},
journal={Science},
volume={280},
number={5364},
pages={698--701},
year={1998},
abstract={},
discipline={Law},
research_type={Theory},
industry={Biotech, Pharma},
thicket_stance={Pro},
thicket_stance_extract={The result has been a spiral of overlapping patent claims in the hands of different owners, reaching ever further upstream in the course of biomedical research.},
thicket_def={#A, #B, Overlapping Patents, Cummulative Invention, Complementary Inputs, Diversely-Held, Transaction Costs},
thicket_def_extract={Building on Heller’s theory of anticommons property (3), this article identifies an unintended and paradoxical consequence of biomedical privatization: A proliferation of intellectual property rights upstream may be stifling life-saving innovations further downstream in the course of research and product development... Anticommons property can best be understood as the mirror image of commons property (3, 8). A resource is prone to overuse in a tragedy of the commons when too many owners each have a privilege to use a given resource and no one has a right to exclude another (9). By contrast, a resource is prone to underuse in a “tragedy of the anticommons” when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. In theory, in a world of costless transactions, people could always avoid commons or anticommons tragedies by trading their rights (10). In practice, however, avoiding tragedy requires overcoming transaction costs, strategic behaviors, and cognitive biases of participants (11), with success more likely within close-knit communities than among hostile strangers (12– 14).... The tragedy of the anticommons refers to the more complex obstacles that arise when a user needs access to multiple patented inputs to create a single useful product. Each upstream patent allows its owner to set up another tollbooth on the road to product development, adding to the cost and slowing the pace of downstream biomedical innovation. Current examples in biomedical research demonstrate two mechanisms by which a government might inadvertently create an anticommons: either by creating too many concurrent fragments of intellectual property rights in potential future products or by permitting too many upstream patent owners to stack licenses on top of the future discoveries of downstream users.... Stacking licenses. The use of reachthrough license agreements (RTLAs) on patented research tools illustrates another path by which an anticommons may emerge. As we use the term, an RTLA gives the owner of a patented invention, used in upstream stages of research, rights in subsequent downstream discoveries. Such rights may take the form of a royalty on sales that result from use of the upstream research tool, an exclusive or nonexclusive license on future discoveries, or an option to acquire such a license... Transaction costs of bundling rights. High transaction costs may be an enduring impediment to efficient bundling of intellectual property rights in biomedical research.},
tags={#Core Paper},
filename={Heller Eisenberg (1998) - Can Patents Deter Innovation The Anticommons In Biomedical Research.pdf}
}
@article{heller1997tragedy,
title={Tragedy of the Anticommons: Property in the Transition from Marx to Markets, The},
author={Heller, Michael A},
journal={HARV. l. Rev.},
volume={111},
pages={621},
year={1997},
abstract={Why are many storefronts in Moscow empty while street kiosks in front are full of goods? This article develops a theory of anitcommons property to help explain the puzzle of empty storefronts and full kiosks. Anticommons property can be understood as the mirror image of commons property. By definition, in a commons, multiple owners are each endowed with the privilege to use a given resource, and no one has the right to exclude another. When too many owners have such privileges of use, the resource is prone to overuse – a tragedy of the commons. In an anitcommons, by my definition, multiple owners are each endowed with the right to exclude others from a scarce resource, and no one has an effective privilege of use. When there are too many owners holding rights of exclusion, the resource is prone to underuse – a tragedy of the anitcommons. Anticommons property may appear whenever new property rights are being defined. For example in Moscow, multiple owners have been endowed initially with competing rights in each storefront, so no owner holds a useable bundle of rights and the store remains empty. Once an anticommons has emerged, collecting rights into private property bundles can be brutal and slow. This article explores the dynamics of anitcommons property in transition economies, formalizes the empirical material in a property theory framework, and then shows how the idea of anticommons property can be a useful new tool for understanding a range of property puzzles. The difficulties of overcoming a tragedy of the anticommons suggest that property theorists might pay more attention to the content of the property bundles, rather than focusing just on the clarify rights. },
discipline={Law},
research_type={Theory},
industry={General},
thicket_stance={Pro},
thicket_stance_extract={Governments may create anticommons property in developed market economies, as well as in transition countries. In the United States, vivid examples appear at the frontiers of Native American law and intellectual property protection.20 Whether anticommons tragedy emerges in a developed or transition economy, and whether it lasts for a short or long period, societies can avoid its social costs by creating more coherent initial endowments. The difficulties of overcoming a tragedy of the anticommons suggest that property theorists and policymakers should pay more attention to the content of property bundles,2' rather than focusing just on the clarity of rights... Within United States law, powerful applications of the anticommons idea appear often in the intellectual property and the land use areas. In a forthcoming article, Rebecca Eisenberg and I use an anticommons analysis to show how increased patentability of basic biomedical research may lead to the development of fewer useful pharmaceutical products.},
thicket_def={#A, #B},
thicket_def_extract={In an anticommons, by my definition, multiple owners are each endowed with the right to exclude others from a scarce resource, and no one has an effective privilege of use. 11 When there are too many owners holding rights of exclusion, the resource is prone to underuse - a tragedy of the anticommons.12 Legal and economic scholars have mostly overlooked this tragedy, but...},
tags={#Core Paper, Seminal Theory!},
filename={Heller (1998) - The Tragedy Of The Anticommons.pdf}
}
@article{huang2009does,
title={Does patent strategy shape the long-run supply of public knowledge? Evidence from human genetics},
author={Huang, K.G. and Murray, F.E.},
journal={Academy of Management Journal},
volume={52},
number={6},
pages={1193--1221},
year={2009},
abstract={Knowledge-based firms seeking competitive advantage often draw on the public knowledge stream (ideas embedded in public commons institutions) as the foundation for private knowledge (ideas firms protect through private intellectual property [IP] institutions). However, understanding of the converse relationship—the impact of private knowledge strategies on public knowledge production—is limited. We examine this question in human genetics, where policy makers debate expanding IP ownership over the human genome. Our difference-in-differences estimates show that gene patents decrease public genetic knowledge, with broader patent scope, private sector ownership, patent thickets, fragmented patent ownership, and a gene’s commercial relevance exacerbating their effect.},
discipline={Mgmt},
research_type={Empirical},
industry={Genetics},
thicket_stance={Pro},
thicket_stance_extract={The third element of our results highlights the ways in which the patent landscape contours the long-run production of genetic knowledge. Scholars have debated whether and to what extent patent thickets and patent fragmentation impede follow- on innovation. Ziedonis (2004) found evidence that complex patent thickets limit future patent contributions to private knowledge (in the semiconductor industry), yet no empirical evidence has spoken directly to the relationship between the patent landscape and public knowledge production. We took advantage of the specificity of gene sequences to develop the first large-scale empirical evidence of this type. We show that although the relationship between patent thicket size and knowledge production is noisy (the results were directionally as we predicted), increasing ownership fragmentation contributes significantly to the negative impact of patent grant. This finding suggests that even though ownership concentration is an important source of competitive advantage for owners of a patent portfolio, fragmentation is more problematic for follow-on contributors to public knowledge, presumably because of the complexities and costs of navigating and negotiating with many patent assignees in a fragmented patent thicket.},
thicket_def={#A, #B, Quotes Shapiro, References Shapiro, References Heller/Eisenberg, Overlapping Patents, Diversely-Held, Complementary Inputs, Transaction Costs, Cummulative Invention},
thicket_def_extract={In testing whether this effect shapes contributions to public knowledge, we relied on two characteristics that define the patent landscape: “thickets” and “fragmentation.” A patent thicket is “an overlapping set of patent rights requiring those seeking to commercialize new technology to obtain licenses from multiple patentees” (Shapiro 2001:1). We measured thickets as the number of patents claiming the same set of (gene) knowledge inputs.... Although patent thickets may be salient to follow- on researchers, the fragmentation of these multiple competing patent rights across many owners is potentially more problematic. Heller and Eisenberg outlined the following rationale... },
tags={#Core Paper},
filename={Huang Murray (2009) - Does Patent Strategy Shape The Long Run Supply Of Public Knowledge.pdf}
}
@article{kiley1992patents,
title={Patents on random complementary DNA fragments?},
author={Kiley, Thomas D},
journal={Science},
volume={257},
number={5072},
pages={915--918},
year={1992},
publisher={American Association for the Advancement of Science},
abstract={The proposal by the National Institutes of Health (NIH) to patent products resulting merely from sequencing the human genome is a mistake: at worst, it is wrong in patent law; at best, it relies on deficiencies in law concerning what is "useful" as a requirement for patents. The proposal is symptomatic of a problem besieging biotechnology-attempts to control the raw material of scientific experimentation before research has determined the practical value of such material-that needs curing on many fronts. Corrective measures are proposed for adoption by the Executive branch, the Congress, and the courts.},
discipline={Law},
research_type={Discussion},
industry={Genetics},
thicket_stance={Pro},
thicket_stance_extract={Because every step along the way draws another patent application, the path towardp ublicp ossessiono f realb enefit is increasinglyo bscuredb y dense thicketso f intersecting, overlapping, and cross-blocking patents.},
thicket_def={#B, #C1, Dubious Patents, Overlapping Patents, Cummulative Invention, Unspecified Blocking Mechanism},
thicket_def_extract={Today, patents are avidly pursued all along the lengthy road from the most basic science throught o the marketplacef or pharmaceuticals. Because every step along the way draws another patent application, the path towardp ublicp ossessiono f realb enefit is increasinglyo bscuredb y dense thicketso f intersecting, overlapping, and cross-blocking patents. Those operating at the beginnings of the road are most insistent on their right to nail down leverage that will remain formidabled espitem arketplacer ejectiono f the uses to which they say their inventions may be put. The frank aim of these early stagew orkersis to control ultimatea pplications discovered by others. The system is abused if those who would benefit in this way from the later labors of others can posit patents on the most strained utilities imaginable. Typical is the suggestion by NIH that organ differentiation( 18) is sufficient utility for a patent reaching to dominate the later discovery by others of a life-saving application for a cDNA!},
tags={#Core Paper, First Thicket!},
filename={Kiley (1992) - Patents On Random Complementary Dna Fragments.pdf}
}
@book{lessig2001future,
title={The future of ideas: The fate of the commons in a connected world},
author={Lessig, Lawrence},
year={2001},
publisher={Vintage},
abstract={},
discipline={Law},
research_type={Discussion},
industry={General},
thicket_stance={Pro},
thicket_stance_extract={The complexity in these rights to exclude creates this anticommons problem. And the more severe the problem, the more it will stifle new innovation.},
thicket_def={#A, #B, References Shapiro, References Heller/Eisenberg, Overlapping Patents, Cummulative Invention, Complementary Inputs, Diversely-Held},
thicket_def_extract={...this story about the potential danger of patents in a field where innovation is sequential and complementary (where one builds on another, and the second complements the value of the first) gets additional support from an ingenious argument that Michigan law professor Michael Heller initially made and that economist James Buchanan has now followed up on.115 Heller introduces the concept of an “anticommons.” If a commons is a resource where everyone has a right to use the resource (and therefore sometimes overuse the resource), an anticommons is a resource where many have the right to block the use of a resource by others (and therefore many more underuse the resource)... Nobel Prize–winning economist James Buchanan has expanded this idea to the problem of regulation generally.116 He points to the problem of patents in particular as an example where multiple and overlapping patent protection may create an anticommons, where innovators are afraid to innovate in a field because too many people have the right to veto the use of a particular resource or idea. This potential for strategic behavior by these many rights holders makes it irrational for an innovator to develop a particular idea, just as the possibility of veto by many bureaucrats may leave a particular piece of real property underdeveloped.},
tags={#Core Paper},
filename={Lessig (2001) - The Future Of Ideas.pdf}
}
@article{mann2004myth,
title={The myth of the software patent thicket},
author={Mann, R.J.},
journal={bepress Legal Series},
pages={183},
year={2004},
abstract={This paper is the first part of a wide-ranging study of the role of intellectual property in the software industry. The project focuses on the software industry because of the importance of that industry to the modern economy, because of the importance of innovation to that industry, and because of the well-known difficulties of accommodating traditional intellectual-property regimes (patent, copyright, and trade secret) to innovation in the industry. This paper focuses on innovation in the hundreds of small venture-backed firms that form the bulk of the population of the industry. After a brief description of the history of the industry in Part II, Part III discusses the evidence on which the paper relies: a set of about 50 interviews of industry executives – diversified geographically, by size of company, and by role in the industry (software developers, venture capitalists, lenders, etc.). Relying on those interviews, the paper provides a detailed explication of the role that intellectual property plays in the industry. Parts IV through VI of the paper organize the information from the interviews and situate it in the extensive literatures on venture capital investing, the economics of innovation, and patents. The first substantive topic of the paper (Part IV) is the features of startup firms that attract investment by venture capitalists – generally something about the startup that suggests a “sustainable differentiation” of the firm from its competitors. The differentiation could come from any number of advantages the firm has – a first-mover advantage, special skill of its employees, a unique approach to solving a difficult problem, or, in some cases, intellectualproperty protection.The second substantive part of the paper (Part V) discusses the role of copyright. The major point of this part is that copyright protection is of little value to startup firms. Copyright protection is designed to protect expression, and not functionality. Thus, it provides little of the protection for which venture investors are looking. The basic problem is that it does not offend copyright law if a competitor observes a software product and designs a new product that includes precisely the same functionality, so long as the competitor uses none of the “expression” from the first product. Because the competitor’s customers are for the most part interested in the functionality, not the expression, this is not an important constraint. On the other hand, copyright protection does provide important protections in other areas, most obviously in protecting the later-stage firm’s products from piracy. Generally, this part of the paper tells a story of unsuccessful efforts to stretch the copyright regime to do something it never was intended to do. The final substantive part of the paper (Part VI) discusses the role of patents. Because patents do protect functionality, they have at least the theoretical potential to provide the sustainable differentiation for which investors are looking. The problem, however, is that in many sectors of the software industry innovation is not of a character that a typical patent can protect a firm from competitors: often competitors would be able to design a competing product that works around a firm’s patent. Thus, despite significant increases in patenting in the industry, about 80% of venture-backed software firms do not obtain patents during the early years of their existence. The question, then, is what benefits patents do provide to those firms. This part explores several benefits, including the classic benefit of excluding competitors. In this industry at least, that benefit accrues primarily to small firms, protecting them from the competitive depredations of incumbents. Incumbents, by contrast, rarely use patents to exclude smaller firms from the industry. The part also discusses a series of less conventional benefits small firms gain from software patents: as barter in cross-licensing arrangements, in signaling their technical competence to third parties, in converting tacit knowledge into a verifiable and transferable form, and in making the firm attractive to potential acquirers. The paper closes by discussing the implications of the patent analysis for recent debates about the value of patents in the software industry. The paper starts with a discussion of theoretical literature suggesting that free availability of patented technology is important because of the software industry’s reliance on cumulative patterns of innovation. It then presents evidence about existing practices in the industry suggests that technology in fact is readily available, rebutting the prominent claims of a patent “thicket” that is supposedly stifling innovation in the industry. On the contrary, I argue, to the extent patents have an important effect in the industry, it is an effect that inures primarily to the benefit of the smaller firms trying to find a foothold from which they can compete.},
discipline={Law},
research_type={Survey},
industry={Software},
thicket_stance={Anti},
thicket_stance_extract={What all of this means for purposes of potential patent thickets is that potential innovators know that the large mass of existing patents held by IBM and Microsoft are likely to receive some share of revenues from any major new product. There is, of course, nothing wrong with that. IBM does spend billions of dollars each year on research and development related to the software technology on which it receives patents. It is not alone in that practice.290 The fact that it can earn royalties from those patents through freely licensing them to all comers does not suggest a patent thicket. On the contrary, a patent thicket would exist only if industry licensing practices were such that firms in the industry commonly were unable to agree on terms for licenses and thus retreated from the field of innovation. That is not a plausible portrait of the commercial software industry as it now exists.},
thicket_def={#A, #B, References Shapiro, References Heller/Eisenberg, Overlapping Patents, Cummulative Invention, Unspecified Blocking Mechanism},
thicket_def_extract={The broadest form of the criticism – associated with Carl Shapiro and Larry Lessig – argues that the rapid proliferation of software patents has created a “patent thicket” that deters innovation, particularly by small firms that are not well placed to compete against the portfolios of their larger and better-heeled competitors... Larry Lessig presents it forcefully as a matter of truth that the proliferation of software patents has created a patent “thicket” (Shapiro’s term)256 or an “anticommons” (a term Lessig draws from Michael Heller’s work with Becky Eisenberg257). This concern also pervades James Bessen’s work (by himself and with other co-authors).258 Specifically, the idea is that there are so many overlapping patents in the industry that potential innovators cannot readily obtain the approvals necessary to conduct their research... On the contrary, a patent thicket would exist only if industry licensing practices were such that firms in the industry commonly were unable to agree on terms for licenses and thus retreated from the field of innovation. That is not a plausible portrait of the commercial software industry as it now exists.},
tags={#Core Paper},
filename={Mann (2004) - The Myth Of The Software Patent Thicket.pdf}
}
@article{mann2005patents,
title={Do Patents Facilitate Financing in the Software Industry?},
author={Mann, Ronald J},
journal={Texas Law Review},
volume={83},
pages={961--1009},
year={2005},
abstract={The economic significance of a patent depends on its scope: the broader the scope, the larger the number of competing products and processes that will infringe the patent. Many theoretical papers have tried to assess the effects of fine tuning various aspects of the patent system to make it more efficient.' But only a few have focussed on patent scope,2 even though scope decisions are subject to far more discretion than most of the aspects more intensively studied. Furthermore, most theoretical writing on patents is directed toward issues that as a practical matter are considered largely settled. For example, several economists have explored the question of optimal patent duration.3 Their work did have a direct impact on the decision to extend patent terms on pharmaceuticals to compensate for regulatory lag.4 But despite the scholarly attention to patent duration, the term of most patents remains fixed at seventeen years.5 Likewise, there has been considerable debate over the years on the merits of compulsory licensing of patents under some circumstances,6 yet the intellectual property community has repeatedly rejected the idea.7 Thus, while the literature continues to generate interesting questions about bedrock assumptions and practices, it has little bearing on the everyday operations of the patent system. This Article is an attempt to redress this deficiency by analyzing the economic effects of patent scope.},
discipline={Law},
research_type={Theory, Survey},
industry={Software},
thicket_stance={Anti},
thicket_stance_extract={The actual structure and practices of the industry belie any claim of a patent thicket},
thicket_def={#A-ST, #B-ST, References Shapiro, References Heller/Eisenberg, Overlapping Patents, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism},
thicket_def_extract={Most famously, Lassig argues that the proliferation of software patents has created an "anticommons" or a patent thicket... so many overlapping patents in the industry that potential innovators cannot readily obtain the approvals necessary to conduct their research. The premise of the model is that assiets will go unused because of the costs of obtaining the permissions necessary to use them.},
tags={#Core Paper, Software, Survey, No Thickets!, No Search},
filename={Mann (2005) - Do Patents Facilitate Financing In The Software Industry.pdf}
}
@article{merges1996contracting,
title={Contracting into liability rules: Intellectual property rights and collective rights organizations},
author={Merges, Robert P},
journal={Cal L. Rev.},
volume={84},
pages={1293},
year={1996},
abstract={As intellectual property rights have gained in prominence, businesspeople and scholars alike have complained of the increasing burden of obtaining intellectual property licenses and, failing this, litigating intellectual property disputes. Intellectual property experts, especially scholars, have responded to this burgeoning thicket of rights with a series of initiatives to expedite deal making by means of statutory compulsory licensing. These licenses are classic examples of "liability rulesh" in the foundational legal entitlements framework of Guido Calabresi and A. Douglas Melamed. They appear to be a compromise: they address the mushrooming transactional hurdle created by new and stronger intellectual property rights, while preserving most of the economic advantages that accompany strengthened rights. In this Article, Professor Merges argues that proposals to create more compulsory licenses are rooted in a faulty theoretical framework. Based on a survey of the diverse institutions various industries have cultivated to handle intellectual property transactions, Merges contends that "repeat players" (individuals and firms that frequently need to exchange rights) can and often do take steps to overcome transactional bottlenecks. Whether through copyright collectives, such as ASCAP and BMI in the music industry, or undertakings such as patent pools in automobile and aircraft manufacturing, those with a recurring need to transact in intellectual property rights invest in administrative structures that lower the costs of exchanging rights. Among other functions, these collective rights organizations promulgate rules and procedures for placing a monetary value on members' property rights. They thus conserve on transaction costs either by making it easier to identify and locate rightholders, or by creating the occasion for repeat-play, reciprocal bargaining, versus more costly one-shot exchanges. Drawing on a body of academic literature known as the new institutional economics, Professor Merges explains and analyzes the origins and operation of these organizations. He also argues that entitlement theory must be adjusted to recognize the possibility that such institutions will evolve out of a background of strong property rights. More generally, he points out that entitlement theory ought to incorporate a more dynamic understanding of the importance of contracting after entitlements are granted. Professor Merges applies his observations and theoretical insights to an important contemporary controversy: whether Congress ought to legislate a compulsory license for digital content needed by the multimedia industry. He argues that it should not. Given the underlying economics, and consistent with experience in other industries, existing intellectual property rights will force industry participants to invest in institutions to conduct transactions. Indeed, consistent with the analysis in this Article, evidence indicates this is already occurring},
discipline={Law},
research_type={Theory, Discussion},
industry={General},
thicket_stance={Pro},
thicket_stance_extract={As intellectual property rights have gained in prominence, businesspeople and scholars alike have complained of the increasing burden of obtaining intellectual property licenses and, failing this, litigating intellectual property disputes. Intellectual property experts, especially scholars, have responded to this burgeoning thicket of rights with a series of initiatives to expedite deal making by means of statutory compulsory licensing.},
thicket_def={#A-T, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism},
thicket_def_extract={This Article is aimed at providing conceptual guidance for those who need to traverse the new thicket of intellectual property rights (IPRs).' Each vine, each plant, standing in one's path represents a distinct IPR owned by an individual. To pass through, one needs a license from each owner. Where a single right blocks the path, this is easy: a single licensing contract does the trick. Today, however, business people more often than not encounter a tangled, twisted mass of IPRs, which criss-cross the established walkways of commerce. Progress along this path does not come cheaply; rather, it requires numerous contracts with multiple, independent right holders},
tags={#Core Paper, Seminal Theory!, First Thicket Metaphor, Copyright, Patents},
filename={Merges (1996) - Contracting Into Liability Rules.pdf}
}
@article{merges1999institutions,
title={Institutions for intellectual property transactions: the case of patent pools},
author={Merges, Robert P},
journal={University of California at Berkeley Working Paper},
year={1999},
abstract={In this Chapter I hope to accomplish three things: briefly summarize trends in the economic theory of intellectual property rights (IPRs); describe some ideas of my own on the emergence of IPR exchange institutions, and describe how an emphasis on institutions fits into existing theory; and ground these issues in a discussion of collective IPR licensing, in particular, patent pools. I begin with a discussion of how transactions have crept into IP theory, and then turn to an examination of actual institutions that have evolved out of the need for various industries to conduct a large volume of IPR transactions.},
discipline={Law},
research_type={Discussion},
industry={General},
thicket_stance={Neutral},
thicket_stance_extract={The way forward from here is obvious. We need both more data, and more nuanced theory to account for it. And we also need a better understanding of when and how government policy can be brought to bear on these issues. For example, we are just beginning to see how patterns of post-grant transactions affect the economic impact of various property right entitlements. This will have obvious implications for our thinking about the proper contours of property right grants. At the same time, it is likely that in certain cases it will be very difficult or impossible to see far enough down the road to predict the post-grant landscape. In such cases, we must be sensitive to the need for rules and doctrines that permit the “visible hand” of government to prod or even force parties into transactions.},
thicket_def={#A-T, #B-T, References Heller/Eisenberg, Overlapping Patents, Cummulative Invention, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up},
thicket_def_extract={The recently developed “anticommons” theory associated with Michael Heller and (as applied to IPR problems) Heller and Rebecca Eisenberg , advances this theme by more explicitly analyzing interactions between property rights and transactions.7 The basic idea is that granting too many property rights of too small a scale can preclude effective exploitation of economic resources. Heller defines an “anticommons” as an economic resource that is covered by a large number of individual exclusionary rights. Businesspeople must bundle numerous rights to make good use of the resource.8 If various impediments to bargaining are present, this may prove difficult; as a result, the resource may be underutilized.9 The authors present two “current examples in biomedical research”: the creation of “too many concurrent fragments of [IPRs] in potential future products,” and rules permitting 7 “too many upstream patent owners to stack licenses on top of the future discoveries of downstream users.”12... Heller identifies bargaining failures, holdup problems in particular, as a key reason for anticommons tragedies. As he points out, in many settings rights are held by parties who will not undergo repeat interactions.... Anticommons theory tells a series of similar cautionary tales about the doleful effects of too many overlapping property rights... The next step is to address the issues identified by anticommons theory: strategic behavior 34 and cognitive bias.... The optimists have not for the most part studied the gene fragment “business,” which in any case is still forming. They have instead concentrated on two types of industries: (1) established, technology-intensive industries, where the lineup of players is fairly stable, technological complementarities are common, and patent pools are a familiar sight on the industrial landscape; and (2) industries where IPR-producers are widely scattered but buyers need to buy in bulk, which creates demand for large packages of IPRs},
tags={#Core Paper, IPR Reform},
filename={Merges (1999) - Institutions For Intellectual Property Transactions.pdf}
}
@article{mossoff2011rise,
title={Rise and Fall of the First American Patent Thicket: The Sewing Machine War of the 1850s, The},
author={Mossoff, A.},
journal={Ariz. L. Rev.},
volume={53},
pages={165},
year={2011},
abstract={When Michael Heller proposed that excessively fragmented property rights in land can frustrate its commercial development, patent scholars began debating whether Heller’s anticommons theory applies to property rights in inventions. Do ?patent thickets? exist? The rise and fall of the first American patent thicket—the Sewing Machine War of the 1850s—confirms that patent thickets do exist and that they can frustrate commercial development of new products. But this historical patent thicket also challenges the widely held assumption that this is a modern problem arising from allegedly new issues in the patent system, such as incremental high-tech innovation and the impact of ?patent trolls.? The Sewing Machine War exhibited all of these phenomena, proving that these are hoary issues in patent law. The denouement of this patent thicket in the Sewing Machine Combination of 1856, the first privately formed patent pool, further challenges the conventional wisdom that patent thickets are best solved through public-ordering regimes that limit property rights in patents. The invention and incredible commercial success of the sewing machine is a striking account of early American technological, commercial, and legal ingenuity, which heralds important empirical lessons for how patent thicket theory is understood and applied today.},
discipline={Econ},
research_type={Discussion},
industry={Sewing},
thicket_stance={Pro},
thicket_stance_extract={Additionally, a patent thicket can block new research into follow-on inventions,10 preventing the ?Progress of . . . the useful Arts.?11 There is now a debate raging in the literature as to whether patent thickets in fact lead to such problems,12 and vivid anecdotes abound about obstructed development of new drugs13 or problems in distributing life-enhancing genetically engineered foods to the developing world.... It may be only one illustration of a patent thicket and its attendant concerns, but it is an extremely robust case study, and as such it exposes some of the ways in which contemporary patent thicket theory has become impoverished by its own underlying assumptions.},
thicket_def={#A-T, #B-T, References Shapiro, References Heller/Eisenberg, Diversely-Held, Transaction Costs, Cummulative Invention, Unspecified Blocking Mechanism},
thicket_def_extract={A ?patent thicket? exists when too many patents covering individual elements of a commercial product are separately owned by different entities.7 This concept is not unique to patent law; it is based on Professor Michael Heller‘s theory of the anticommons in real property, which arises when there is excessive fragmentation of ownership interests in a single parcel of land.8 According to economic theory, the problem of such excessive fragmentation of ownership interests is straightforward: it increases transaction costs, accentuates hold-out problems, and precipitates costly litigation, which prevents commercial development of the affected property.9 Additionally, a patent thicket can block new research into follow-on inventions,10 preventing the ?Progress of . . . the useful Arts.?},
tags={#Core Paper, Patent Pool},
filename={Mossoff (2011) - Rise And Fall Of The First American Patent Thicket.pdf}
}
@book{mossoff2009stitch,
title={A stitch in time: The rise and fall of the sewing machine patent thicket},
author={Mossoff, A.},
year={2009},
publisher={George Mason University School of Law},
abstract={Scholarly interest in how anticommons theory applies to patents has skyrocketed since Professor Michael Heller first proposed a decade ago that excessively fragmented interests in land can frustrate its commercial development. There is now a vigorous debate on whether anticommons exist in patent law, and, if so, whether these “patent thickets” impede innovation in patented products. This article contributes to this debate by analyzing the rise and fall of the first patent thicket in American history: the “Sewing Machine War” of the 1850s. The invention of the sewing machine in the antebellum era represents many firsts in the American legal system—the first patent thicket, the first “patent troll,” and the first patent pool. Significantly, this case study verifies that patent thickets exist and that they can frustrate commercial development of new products. But it also challenges widely held assumptions in the patent thicket literature. Many scholars believe that this is largely a modern problem arising from a host of allegedly new issues in the patent system, such as incremental high-tech innovation, excessive litigation, and the rise of “patent trolls.” Yet the sewing machine patent thicket exhibited all of these phenomena, revealing that patent thickets have long existed within the historically successful American patent system. The denouement of the sewing machine patent thicket in the Sewing Machine Combination of 1856, the first privately formed patent pool, further challenges the widely held belief that patent thickets are best solved through new statutes, regulations or court decisions that limit property rights in patents. To the contrary, the Sewing Machine Combination was formed against the backdrop of the strong protection of patent rights in the antebellum era. Thus, the story of the invention of the sewing machine is a striking account of early American technological, commercial and legal ingenuity, which heralds important empirical lessons for how patent thicket theory is understood and applied today.},
discipline={Econ},
research_type={Discussion},
industry={Sewing},
thicket_stance={Pro},
thicket_stance_extract={The story of the sewing machine—its incremental invention, the Sewing Machine War, and its ultimate commercial success after the creation of the Sewing Machine Combination—is an important empirical case study of patent thickets. This historical patent thicket challenges the principal focus of the literature on recent inventions and recent changes in patent law, such as the rise of biotech patenting since 1981.237 This too-narrow focus on recent technology and innovation may be impoverishing the policy debates concerning patent thickets.},
thicket_def={#A-T, #B-T, References Shapiro, References Heller/Eisenberg, Diversely-Held, Transaction Costs, Overlapping Patents, Cummulative Invention},
thicket_def_extract={Professor Michael Heller first proposed a decade ago that excessively fragmented interests in land can frustrate its commercial development. There is now a vigorous debate on whether anticommons exist in patent law, and, if so, whether these “patent thickets” impede innovation in patented products... A “patent thicket” exists when too many patents covering individual elements of a commercial product are separately owned by different entities... According to economic theory, the problem of such excessive fragmentation of ownership interests is straightforward: It increases transaction costs, accentuates hold-out problems, and precipitates costly litigation, which prevents commercial development of the affected property.12 Additionally, a patent thicket can block new research into follow-on inventions... no one has yet explained why this patent thick arose beyond identifying the fact that there were overlapping patent claims. But this does not by itself create a patent thicket, as there have to be reasons why patent-owners assert these property claims against each other to the point of creating a litigation free-for-all, replicating the conditions of Thomas Hobbes’s state of nature.},
tags={#Core Paper, Patent Pool},
filename={Mossoff (2009) - A Stitch In Time The Rise And Fall Of The Sewing Machine Patent Thicket.pdf}
}
@article{murray2007formal,
title={Do formal intellectual property rights hinder the free flow of scientific knowledge?: An empirical test of the anti-commons hypothesis},
author={Murray, Fiona and Stern, Scott},
journal={Journal of Economic Behavior \& Organization},
volume={63},
number={4},
pages={648--687},
year={2007},
abstract={Although many scholars suggest that IPR has a positive effect on cumulative innovation, a growing “anticommons” perspective highlights the negative role of IPR over scientific knowledge. At its core, this debate is centered on how intellectual property rights over a given piece of knowledge affect the propensity of future researchers to build upon that knowledge in their own scientific research activities. This article frames this issue around the concept of dual knowledge, in which a single discovery may contribute to both scientific research and useful commercial applications, and finds evidence for a modest anti-commons effect. A key implication of dual knowledge is that it may be simultaneously instantiated as a scientific research article and as a patent. Such patent-paper pairs are at the heart of our empirical strategy.We exploit the fact that patents are granted with a substantial lag, often many years after the knowledge is initially disclosed through paper publication. The knowledge associated with a patent-paper pair therefore diffuses within two distinct intellectual property environments, one associated with the pre-grant period and another after formal IP rights are granted. Relative to the expected citation pattern for publications with a given quality level, the anti-commons perspective suggests that the citation rate for a scientific publication should fall after formal IP rights associated with that publication are granted. Employing a differences-in-differences estimator for 169 patent-paper pairs (and including a control group of other publications from the same journal for which no patent is granted), we find evidence for a modest anti-commons effect (the citation rate after the patent grant declines by approximately 10 to 20 percent). This decline becomes more pronounced with the number of years elapsed since the date of the patent grant and is particularly salient for articles authored by researchers with public sector affiliations.},
discipline={Econ},
research_type={Discussion, Empirical},
industry={Academia},
thicket_stance={Weak Pro},
thicket_stance_extract={Relative to the expected citation pattern for publications with a given quality level, the anti-commons perspective suggests that the citation rate for a scientific publication should fall after formal IP rights associated with that publication are granted. Employing a differences-in-differences estimator for 169 patent-paper pairs (and including a control group of other publications from the same journal for which no patent is granted), we find evidence for a modest anti-commons effect (the citation rate after the patent grant declines by approximately 10 to 20 percent). This decline becomes more pronounced with the number of years elapsed since the date of the patent grant and is particularly salient for articles authored by researchers with public sector affiliations.},
thicket_def={#B-T, References Shapiro, References Heller/Eisenberg, Overlapping Patents, Cummulative Invention, Diversely-Held, Transaction Costs},
thicket_def_extract={In other words, broad patents in complex areas with a high degree of prior art might be expected to be associated with denser patent thickets and hence stronger anti-commons effects. Likewise, prior researchers have suggested that patents over research tools (such as the Oncomouse, cell lines, gene probes) may be associated with larger anti-commons effects for at least two reasons. First, research tools are of broad relevance to many researchers and thus may impinge on many ongoing lines of research. Second, by and large, the uses of research tools are subject to a high degree of transparency in use: materials and tools are usually covered by material transfer agreements and other institutional arrangements.... As the number of prior art references increases, the potential for a “patent thicket” increases (Shapiro, 2001); in the spirit of Heller and Eisenberg (1998), the presence of a patent thicket may exacerbate the anti-commons effect and result in a greater decline in the post-grant citation rate of patented articles.},
tags={#Core Paper},
filename={Murray Stern (2007) - Do Formal Intellectual Property Rights Hinder The Free Flow Of Scientific Knowledge.pdf}
}
@article{nagaoka2006empirical,
title={An Empirical Assessment of the Effects of Patent Thickets},
author={Nagaoka, S. and Nishimura, Y.},
journal={unpublished, Hitotsubashi University},
year={2006},
abstract={This paper investigates the effects of patent thicket, exploiting a unique measure of the patent thicket from an inventor survey and on data on the use of patents by around 1,200 Japanese firms. First, we develop an index of patent thicket in each industry, mainly using the size of complementary patents necessary for commercializing an invention, which is from the RIETI inventor survey. Secondly, we will assess empirically how “patent thickets” affect the patenting propensity and the use of the patents as well as whether it negatively affects the appropriability of the R&D. In such assessment, we focus on the interaction effects between the level of patent thickets and firm size, based on a theoretical view which patent thickets affect a large firm more, since the latter has a large stake for the prevention of a hold-up and has a larger demand for the combining patents. Focusing on the firm-industry interaction effects allow us to control for industry fixed effects. Major findings are as follows. Firstly, we have found that patent thickets are high in information and communication electronics equipment sector, information and communication sector and motor vehicles sectors while they are low in printing and food products industries. These results based on the average number of patents joint used for commercializing an invention are largely consistent with existing empirical studies on patent thickets. Secondly, we have found that patenting propensity increases more with firm size in the industry where patent thicket is high, controlling for industry fixed effects. Such effects do not exist among small firms. On the other hand, our findings suggest that a number of invention disclosures to the IPR department or that for applying a patent by a firm do not increase significantly more with firm size in the industry where patent thicket is high. Thirdly, we have found that while the proportion of used patents declines with firm † We would like to thank for valuable comments by the members of the research project at the Institute of Intellectual Property. We would like to thank for the Japan Patent Office for enabling us to use the firm level data of the Survey of Intellectual Property-Related Activities. 2 size, such effect is no stronger in the industry where patent thicket is high. One explanation for this is that cross-licensing is often a response for patent thicket problem. Cross licensing facilitates access to complementary technologies of other firms, which makes commercialization of own technology easier. We also find that while blocking increases with firm size, such effect is no stronger in the industry where patent thicket is high. We do not observe significantly larger negative effects of patent thickets on the patent use by every size of firms. Lastly, we have found that exclusively used patents make the largest contributions to a firms’ profit, in particular, more than cross licensed patents.},
discipline={Mgmt},
research_type={Empirical},
industry={General},
thicket_stance={Weak Pro},
thicket_stance_extract={This paper has investigated empirically how a “patent thicket” affects the patenting propensity and the use of the patents as well as whether it negatively affects the appropriability of the R&D and the patenting of a firm, exploiting a unique measure of the patent thicket from an inventor survey and on data on the use of patents by around 1,200 Japanese firms.... Secondly, we have found that patenting propensity increases more with firm size in the industry where patent thicket is high, controlling for industry fixed effects. Such effects do not exist among small firms.... Thirdly, we have found that while the proportion of used patents declines with firm size, such effect is no stronger in the industry where patent thicket is high. One explanation for this is that cross-licensing is often a response for patent thicket problem... We do not observe significantly larger negative effects of patent thickets on the patent use by every size of firms.},
thicket_def={#A-T, References Shapiro, References Heller/Eisenberg, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up},
thicket_def_extract={A patent thicket is defined as a situation that a firm is required to use many complementary technologies which have been patented by the other firms when this firm produces and sells a product or does research. There are two major causes for patent thickets: (1) a firm needs to use many technologies because of its highly complex products in terms of manufacturing or R&D processes, or product attributes, and (2) many firms compete fiercely in R&D within the same technology area, which results in the fragmented ownership of patents. There is a widespread concern that a firm is blocked from utilizing complementary technologies when a patent thicket exists. Heller and Eisenberg(1998) point out the danger that the extensive patenting of upstream inventions might seriously hinder a firm from doing downstream research in biomedical field of research. They call this phenomenon as “the Tragedy of Anti-commons” in which firms cannot develop efficient contracts to exchange or access complementary technologies effectively among themselves. Shapiro (2001) point out that there are two types of problems caused by a patent thicket: (1) the complements problem; and (2) the hold-up problem... These results based on the average size of complementary patents necessary for commercializing an invention are largely consistent with existing empirical studies on patent thickets.},
tags={#Core Paper},
filename={Nagaoka Nishimura (2006) - An Empirical Assessment Of The Effects Of Patent Thickets.pdf}
}
@article{noel2006strategic,
title={Strategic patenting and software innovation},
author={Noel, M.D. and Schankerman, M.},
year={2006},
abstract={Strategic patenting is widely believed to raise the costs of innovating, especially in industries characterised by cumulative innovation. This paper studies the effects of strategic patenting on R&D, patenting and market value in the computer software industry. We focus on two key aspects: patent portfolio size which affects bargaining power in patent disputes, and the fragmentation of patent rights (.patent thickets.) which increases the transaction costs of enforcement. We develop a model that incorporates both effects, together with R&D spillovers. Using panel data for the period 1980-99, we find evidence that both strategic patenting and R&D spillovers strongly affect innovation and market value of software firms.},
discipline={Econ},
research_type={Empirical},
industry={Software},
thicket_stance={Weak Pro},
thicket_stance_extract={Third, greater concentration (less frag- mentation) of patent rights among rivals reduces both R&D and patenting by the ?rm ?re?ecting less need to have an arsenal of patents to resolve disputes when there are fewer players ?but it increases market value because transaction costs are lower.},
thicket_def={#A-T, References Shapiro, References Heller/Eisenberg, Complementary Inputs, Diversely-Held, Transaction Costs, Strategic Patenting (Bad)},
thicket_def_extract={The argument is that strategic patenting activity creates patent thickets that constrain ?rms?freedom of action in R&D and thus raise the costs of innovation... In such industries, it is a widely held view that patenting activity creates a ?thicket?of fragmented property rights that impedes R&D activity by constrain- ing the ability of ?rms to operate without extensive licensing of complementary technologies. This position was ?rst enunciated by Heller and Eisenberg (1998), who labelled it the ?problem of the anti-commons.?1 By increasing the transaction costs of R&D, patent thickets provide an incentive for ?rms to patent defensively. In e¤ect, this argument implies that patenting creates a negative externality on other ?rms: by increasing the ?rm?s bargaining power in the form of more ?chits to trade?in patent disputes, patenting by one ?rm raises the cost to other ?rms of protecting or appropriating the rents from their innovations. Some authors have claimed that this creates a pris- oner?s dilemma which can lead to excessive patenting in complex technology industries, including semiconductors and software (Bessen and Maskin, 2000).},
tags={#Core Paper},
filename={Noel Schankerman (2006) - Strategic Patenting And Software Innovation.pdf}
}
@inproceedings{regibeau2011assessment,
title={Assessment of potential anticompetitive conduct in the field of intellectual property rights and assessment of the interplay between competition policy and IPR protection},
author={Regibeau, Pierre and Rockett, Katharine},
booktitle={Prepared for the European Commission, Publications Office of the European Union, ISBN 978-92-79-22210-8},
year={2011},
abstract={},
discipline={Policy Report},
research_type={Discussion},
industry={General},
thicket_stance={Neutral},
thicket_stance_extract={This suggests both that it is too early to systematically weaken the traditional “safeguards” that competition law traditionally imposes on cross-licensing and pool agreements and that, even in “thicket-prone” sectors of activity, leniency toward such agreements should require a demonstration that there are actual thickets that would be cleared by the agreement and even possibly some evidence of the benefits involved in clearing these thickets.},
thicket_def={#A-ST, #B-T, References Shapiro, Complementary Inputs, Diversely-Held, Transaction Costs, Overlapping Patents, Cummulative Invention},
thicket_def_extract={The terms “thicket” has been used somewhat indiscriminately in competition law circles to describe various types of concentration of IPRs3. In this report, we use the term in a much more specific and precise sense. Following Shapiro’s definition, patent thickets are “an overlapping set of patent rights requiring that those seeking to commercialise new... technology obtain licenses from multiple partners”.4 Two conditions must then be fulfilled for a thicket to arise. Firstly, the production and sale of a given product involves the use of a large number of patent rights. Secondly, the ownership of those rights is dispersed... It is also important to understand the nature of “overlap” of patent rights that helps define a thicket. Such “overlap” has two main sources. Firstly, different patent rights might cover different aspects of the technology required to produce a new product. In other words, several patents might be technologically essential for the commercialisation of a given product. The second source of overlap comes from the nature of patent rights. These rights can be mutually blocking and are moreover uncertain. In practice this means that a firm with a valid patent covering a given aspect X of a new product might still fear that it might infringe another firm’s patent that relates to the same aspect or at least to a similar underlying innovation. In such a situation, access to the other firm’s patent is not technologically necessary but it is required if the firm wants to proceed under conditions of legal certainty... One might therefore settle on the following modification of Shapiro’s definition: patent thickets arise when the IP rights necessary to market a product and do so without significant risk of infringement are held by a large number of different parties.},
tags={#Core Paper},
filename={Regibeau Rockett (2011) - Assessment Of Potential Anticompetitive Conduct.pdf}
}
@article{reitzig2007sharks,
title={On Sharks, Trolls, and Their Patent Prey—Unrealistic Damage Awards and Firms’ Strategies of “Being Infringed”},
author={Reitzig, M. and Henkel, J. and Heath, C.},
journal={Research Policy},
volume={36},
number={1},
pages={134--154},
year={2007},
abstract={Patent trolls (or sharks) are patent holding individuals or (often small) firms who trap R&D intensive manufacturers in patent infringement situations in order to receive damage awards for the illegitimate use of their technology. While of great concern to management, their existence and impact for both corporate decision makers and policy makers remains to be fully analyzed from an academic standpoint. In this paper we show why patent sharks can operate profitably, why they are of growing concern, how manufacturers can forearm themselves against them, and which issues policy makers need to address. To do so, we map international indemnification rules with strategic rationales of small patent-holding firms and large manufacturers within a theoretical model. Our central finding is that the courts’ unrealistic consideration of the trade-offs faced by inadvertent infringers is a central condition for sharks to operate profitably.},
discipline={Econ},
research_type={Theory},
industry={General},
thicket_stance={Weak Pro},
thicket_stance_extract={We further argued that the increasing technology monitoring efforts for victims of trolls, namely large manufacturing R&D intensive firms, due to ballooning numbers of patent applications, probably led to the increase of sharks’ relevance for innovators. It facilitates 'trapping’ manufacturers by ‘hiding’ patented technologies in confusing patent thickets—a second necessary condition for sharks to operate. oreover, the strengthening of patent holder’s rights in certain jurisdictions (e.g. the US) most likely enabled sharks to operate more profitably, too.},
thicket_def={#A, Complementary Inputs, Diversely-Held, Strategic Patenting (Good)},
thicket_def_extract={Multivariate analysis of the data suggests that in selected discrete technologies, patent ‘fences’ may serve to exclude competitors whereas in complex technologies, ‘thickets’ represent exchange forums for complementary technology.... yielding thickets of complementary patents held by different owners.... Patent thickets owned by various patent holders should prevail in complex technologies such as semiconductors, forcing players to use patents as ‘bargaining chips’.4 Here, from the patentee’s standpoint, exchanging technology should be the first-best use for a patent leading to the highest possible profits as exclusion is virtually infeasible.... As both articles show, the “strategic use” of patents (the two most important types being blocking and cross-licensing with patent ‘thickets’ playing a major role for the latter), has classically been discussed from the perspective of those patent holders who either engage in the production of their own technological goods or consider themselves professional intellectual property suppliers who repeatedly interact with manufacturers.},
tags={#Core Paper, Private Mechanisms, NPEs, Firm Strategy, Defensive/Offensive Patenting, Value from Position/Portfolio},
filename={Reitzig Henkel Heath (2007) - On Sharks Trolls And Their Patent Prey.pdf}
}
@incollection{shapiro2001navigating,
title={Navigating the patent thicket: Cross licenses, patent pools, and standard setting},
author={Shapiro, C.},
booktitle={Innovation Policy and the Economy, Volume 1},
pages={119--150},
year={2001},
abstract={},
discipline={Econ},
research_type={Discussion, Theory},
industry={General},
thicket_stance={Pro},
thicket_stance_extract={This paper takes as given the flood of patents currently being issued by the PTO, and assumes that these patents are indeed creating a patent thicket in the sense that many new products would likely infringe on multiple patents.},
thicket_def={#A, Complementary Inputs, Diversely-Held, Transaction Costs},
thicket_def_extract={See Review},
tags={#Core Paper},
filename={Shapiro (2001) - Navigating The Patent Thicket.pdf}
}
@article{siebert2010jostling,
title={Jostling for advantage or not: Choosing between patent portfolio races and ex ante licensing},
author={Siebert, R. and Von Graevenitz, G.},
journal={Journal of economic behavior \& organization},
volume={73},
number={2},
pages={225--245},
year={2010},
abstract={Licensing can be a solution for hold-up in patent thickets. In this paper we study whether licensing is an effective solution for hold-up. To do this we distinguish between ex ante and ex post licensing. A theoretical model shows that firms’ expectations of blocking in a patent thicket determine whether they license ex ante while ex post licensing arises if expected blocking was low but realized blocking turns out to be high. It can also be shown that ex ante licensing will allow firms to reduce their patenting efforts. A sample selection model of licensing is derived from the theoretical model. Applying this to data from the semiconductor industry we show that licensing does help firms to resolve blocking. However, the probability of observing licensing decreases as fragmentation of property rights increases and arises mainly between large firms with similar market shares. Licensing experience is also an important determinant of licensing. As expected ex ante licensing allows firms to reduce the level of patenting.},
discipline={Econ},
research_type={Theory, Empirical},
industry={General, Semiconductor},
thicket_stance={Weak Pro},
thicket_stance_extract={The model we provide in this paper shows that licensing allows firms to overcome some serious problems arising from the patent thicket. Thus, ex ante licensing helps firms to reduce somewhat the very strong incentives to patent that can arise in patent thickets.},
thicket_def={#A-ST, #B-ST, #C1, References Shapiro, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up, Strategic Patenting (Bad)},
thicket_def_extract={Complex high technology industries are increasingly affected by patent thickets in which firms’ patents mutually block the use of important technologies. Firms facing patent thickets patent intensively to acquire bargaining chips and use licensing to ensure freedom to operate. Such licensing allows rivals to either avoid or resolve hold-up from blocking patents... The complexity and modularity of technology combined with strong increases in the number of patent applications have given rise to patent thickets (Shapiro, 2001; Hall and Ziedonis, 2001). A patent thicket consists of complementary patents related to one technology. The patents in a patent thicket belong to many rival firms. In the absence of cross-licensing agreements, or patent pools, use of the technology is blocked. Avoiding exposure to rivals’ blocking patents is difficult because firms are often not aware of the precise technological trajectory pursued by their rivals (Grindley and Teece, 1997). Additionally, the complexity of high technology products gives rise to connections between patents that are not anticipated. Compounding these problems, the limits of patent rights are always open to interpretation which can lead to unanticipated overlap of patents. Finally, patent offices have limited resources and may overlook prior art or patent overlap (Lemley, 2001).2 In order to contain the threat of hold-up, firms build up large patent portfolios which provide “freedom to operate”... },
tags={#Core Paper},
filename={Siebert VonGraevenitz (2010) - Jostling For Advantage Or Not.pdf}
}
@article{siebert2010licensing,
title={Licensing in the Patent Thicket-Timing and Benefits},
author={Siebert, R.B. and Von Graevenitz, G.},
year={2010},
abstract={Complex high technology industries are increasingly affected by patent thickets in which firms’ patents mutually block the use of important technologies. Firms facing patent thickets patent intensively to acquire bargaining chips and use licensing to ensure freedom to operate. Such licensing allows rivals to either avoid or resolve hold-up from blocking patents. R&D incentives depend on whether licensing takes place ex ante or ex post. We model the choice between ex ante licensing and entry into patent portfolio races leading to ex post licensing. It is shown that higher degrees of blocking lead firms to license ex post, while stronger product market competition leads firms to license ex ante. Empirical results support these theoretical predictions.},
discipline={Econ},
research_type={Theory, Empirical},
industry={General, Semiconductor},
thicket_stance={Pro},
thicket_stance_extract={This also indicates that the ”freedom to operate” explanation of licensing is central to understand licensing in patent thickets. Interestingly, the size of firms’ patent portfolios does not affect their propensity to license. However, it does affect firms’ patenting levels. Finally, we find that the fragmentation of patent rights reduces firms’ propensity to license ex ante and ex post. Thus, a deepening of 29 patent thickets resulting from more complex blocking relationships seems to undermine the usefulness of licensing to resolve blocking.},
thicket_def={#A-T, #D, References Shapiro, Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up, Strategic Patenting (Bad), Dubious Patents},
thicket_def_extract={Licensing can be a solution for hold-up in patent thickets... Explosive growth of patenting world wide has raised fears that patent systems may inhibit economic activity rather than foster it (Jaffe and Lerner, 2004; Bessen and Meurer, 2008). The growth in patenting arising from legal reform (Jaffe, 2000), increasing technological complexity (von Graevenitz et al., 2008) and feedback mechanisms within the patent system (Ziedonis, 2004) is leading to patent thickets (Heller and Eisenberg, 1998; Shapiro, 2001). These occur in semiconductor- and information technology (Hall and Ziedonis, 2001; Ziedonis, 2004) and increasingly in other fields such as genetic diagnostic testing (Huys et al., 2009). In a patent thicket many firms hold patents protecting components of a single technology. Whenever a firm uses such a technology it is vulnerable to hold-up by firms holding blocking patents (Grindley and Teece, 1997; Shapiro, 2001). The threat posed by blocking patents frequently induces firms to build large patent portfolios in costly patent portfolio races. These bolster firms’ bargaining positions in disputes with rivals (Grindley and Teece, 1997; Lemley, 2001). Patent thickets undermine the proper functioning of patent systems: they raise costs of using complex technology and increase incentives to acquire marginal patents.},
tags={#Core Paper},
filename={Siebert VonGraevenitz (2010) - Licensing In The Patent Thicket Timing And Benefits.pdf}
}
@article{sternitzke2008visualizing,
title={Visualizing patent statistics by means of social network analysis tools},
author={Sternitzke, C. and Bartkowski, A. and Schramm, R.},
journal={World Patent Information},
volume={30},
number={2},
pages={115--131},
year={2008},
abstract={The present paper reviews the literature on social network analysis with applications to bibliometric data, and in particular, patent information. Several approaches of network analysis are conducted in the field of optoelectronics to exemplify the power of network analysis tools. Cooperation networks between inventors and applicants are illustrated, emphasizing bibliometric measures such as activity, citation frequency, etc. as well as network theoretical measures, e.g. centrality or betweenness. In this context it is found that inventors who serve as interfaces or links between different inventor groups apply for technologically broader patents, hence, benefiting from their access to different knowledge through their position. Furthermore, citation networks of patent documents as well as patent applicants were drawn. Here, patent thickets could be identified. The position of applicants within citation networks seems to be useful in explaining behaviour of the applicants in the marketplace, such as cooperation or patent infringement trials.},
discipline={Econ},
research_type={Measures,Empirical},
industry={Semiconductor},
thicket_stance={Pro},
thicket_stance_extract={Network analysis for applicants that had entered cross-license agreements for white LEDs with Nichia confirmed the key position of the firm and untangled self-citation networks for Toyoda Gosei and Cree, hence, representing company-specific patent thickets.},
thicket_def={#D, Single Firm, Unspecified Blocking Mechanism},
thicket_def_extract={It therefore seems that the latter company aims to protect its intellectual property by means of a company-specific patent thicket. There are some central patents, some highly cited, and a number of patent families clustered around, citing one or even more central patent families... },
tags={#Core Paper},
filename={Sternitzke Bartkowski Schramm (2008) - Visualizing Patent Statistics By Means Of Social Network Analysis Tools.pdf}
}
@article{strandburg2006law,
title={Law and the Science of Networks: An Overview and an Application to the ``Patent Explosion"},
author={Strandburg, K.J.},
journal={bepress Legal Series},
pages={1617},
year={2006},
abstract={The network may be the metaphor of the present era. A network, consisting of "nodes" and "links" may be a group of individuals linked by friendship; a group of computers linked by network cables; a system of roads or airline flights or another of a virtually limitless variety of systems of connected things." The past few years have seen an explosion of interest in network science," which seeks to move beyond metaphor to analysis in �elds from physics to sociology. Network science highlights the role of relationship patterns in deter- mining collective behavior. It underscores and begins to address the di�culty of predicting collective behavior from individual interactions. This Article seeks �rst to describe how network science can provide new conceptual and empiri- cal approaches to legal questions because of its focus on analyzing the e�ects of patterns of relationships on collective behavior. The Article then illustrates the network approach by describing a study of the network created by patents and the citations between them. Burgeoning patenting has raised concerns about patent quality, re ected in proposed legislation and in renewed Supreme Court attention to patent law. The network approach allows us to get behind the increasing numbers and investigate the patterns of relationships between patented technologies. We can then distinguish between faster technological progress, increasing breadth of patented technologies, and a lower patentability standard as possible explanations for increased patenting. We �nd that, since the late 1980s, the disparity in likelihood of citation between the most citable" and least citable" patents has grown, suggesting that the least citable patents may represent increasingly trivial inventions. One possible explanation of this increasing strati�cation is increasing reliance by the Federal Circuit Court of Appeals on the widely criticized motivation or suggestion to combine" test for nonobviousness, which is at issue in the case of KSR v. Tele ex, currently pending at the Supreme Court. We also discuss how network science may be employed to address other issues of patent law.},
discipline={Law},
research_type={Discussion, Measures},
industry={General},
thicket_stance={Neutral},
thicket_stance_extract={A high density of patents in a particular technological “niche” need not always indicate a patent thicket, however. Closely related patented technologies may be potential substitutes for one another -- creating something more like patent supermarkets offering many nearly interchangeable options than patent thickets.},
thicket_def={Complementary Inputs, Diversely-Held, Transaction Costs, Hold-up, Cummulative Invention},
thicket_def_extract={#A-T, There are dire predictions of a patent “thicket,”65 in which technological progress is made increasingly difficult by the need to negotiate multiple levels of “blocking patent” rights on each of the many patented components which may be needed to produce a new commercial product.66 One way to avoid a potential thicket is for competing patent holders to negotiate cross-licenses or “patent pools.”... While the precise significance of a patent citation varies, a citation sometimes indicates that the claims of the cited patent encompass the claims of the citing patent and that a “blocking patent” situation exists so that permission from both patent owners is needed in order to use the invention claimed in the citing patent. As will be discussed in Part V, we believe it is likely that the structure of the patent citation “map” can be mined for signatures of patent “thickets,” in which there is a high density of overlapping patent claims, so as to test, for example, whether such “thickets” are increasingly prevalent in the patent system... On the one hand, there is the fear of a patent “thicket” in which the transaction costs associated with obtaining the necessary patent licenses to do something of practical usefulness... high density of patents in a particular technological “niche” need not always indicate a patent thicket, however. Closely related patented technologies may be potential substitutes for one another -- creating something more like patent supermarkets offering many nearly interchangeable options than patent thickets. If these patents are separately owned, competition between patent holders will reduce licensing fees and the issue of hold-up will not arise.},
tags={#Core Paper},
filename={Strandburg (2006) - Law And The Science Of Networks.pdf}
}
@article{ukipo2011patentthickets,
title={Patent Thickets: An overview},
author={Intellectual Property Office Patent Informatics Team},
journal={UK Intellectual Property Office},
year={2011},
abstract={},
discipline={Policy Report},
research_type={Discussion},
industry={General},
thicket_stance={Neutral},
thicket_stance_extract={In order to explore some of the issues surrounding thickets in more detail, a case study based on safety razors was chosen. This is not one of the traditional high-tech areas presently associated with thickets, being more fundamentally mechanical in nature. However, there is a well known high patent density caused by the market dominance of the main players. The data show that the companies involved are mainly large multinational companies, thus adding to the notion that there may be a barrier to entry. However, there are smaller companies present and as such there is no conclusive evidence either way, at this stage, to suggest that there are barriers to entry. The presence of an SME in a densely populated technology space is encouraging, but the key test is whether these companies can grow and develop within such spaces, and is an area which needs to be addressed in the next round of analysis.},
thicket_def={#A, #B, #C1, Quotes Shapiro, References Shapiro, Complementary Inputs, Diversely-Held, Overlapping Patents, Cummulative Invention, Single Firm},
thicket_def_extract={The phrase “patent thicket” is a descriptive term which highlights issues that new entrants to a market may face when attempting to innovate within, or enter into, a technology space having existing intellectual property rights. The most generally used definition of a thicket is that coined by Shapiro: “a dense web of overlapping intellectual property rights that a company must hack its way through in order to actually commercialize new technology”. Equal weighting is given to fragmented technological areas (areas where there are large numbers of small patent holdings), or areas where there are small numbers of large players with large patent holdings, each of which creates a thicket that any entrants into the area will have to negotiate in order to be able to operate. There is no clear consensus on terms used to describe patent thickets and the entities involved with them. If these terms were applied consistently, further debate on any issues could be conducted on a level playing field. Any change in policy associated with patent thickets should be carefully considered for its potential impact across different technology landscapes... However, it was interesting to note that some indicators potentially give more useful insight into the type of thicket present... However, despite Shapiro’s comments, on reviewing the general literature in this area, it seems that no concrete definition of a thicket has yet been agreed by researchers, as a number of different interpretations have been created. These definitions tend to fall into a number of forms. Fragmented property rights: • When multiple organisations each own individual patents that are collectively necessary for a particular technology their competing intellectual property rights form a patent thicket10 • Patent thickets are sets of overlapping property rights that occur in fragmented technology Markets11 • A patent thicket exists when too many patents covering individual elements of a commercial product are separately owned by different entities.12 Blocking patents: • “The combination of complex technology and high volume patenting creates patent thickets which can be defined as dense webs of overlapping patent rights... The measure derives directly from information on blocking of one patent by another”13 • “A dense and overlapping set of complementary patent rights…of which at least one patent right is blocking the production of an innovation.” Alternative terms such as “patent floods”15 and “patent clusters”16,17 can also be used. For consistency the term patent thicket has been used throughout the current document. These differing definitions of what exactly a thicket may be, does not aid the reader in comprehending the scope of the issue. Indeed, the idea that patents should not be granted for the same invention, in theory, should not occur as was noted earlier in Section 2 where the scope of claims was discussed.},
tags={#Core Paper},
filename={UKIPO (2011) - Patent Thickets An Overview.pdf}
}
@article{von2012incidence,
title={Incidence and Growth of Patent Thickets-The Impact of Technological Opportunities and Complexity},
author={Von Graevenitz, G. and Wagner, S. and Harhoff, D.},
journal={Journal of Industrial Economics},
year={2012},
abstract={We investigate incidence and evolution of patent thickets. Our empirical analysis is based on a theoretical model of patenting in complex and discrete technologies. The model captures how competition for patent portfolios and complementarity of patents affect patenting incentives. We show that lower technological opportunities increase patenting incentives in complex technologies while they decrease incentives in discrete technologies. Also, more competitors increase patenting incentives in complex technologies and reduce them in discrete technologies. To test these predictions a new measure of the density of patent thickets is introduced. European patent citations are used to construct measures of fragmentation and technological opportunity. Our empirical analysis is based on a panel capturing patenting behavior of 2074 firms in 30 technology areas over 15 years. GMM estimation results confirm the predictions of our theoretical model. The results show that patent thickets exist in 9 out of 30 technology areas. We find that decreased technological opportunities are a surprisingly strong driver of patent thicket growth.},
discipline={Econ},
research_type={Empirical},
industry={General},
thicket_stance={Pro},
thicket_stance_extract={We are able to show that patent thickets exist in nine out of thirty technology areas at the EPO. The data we use indicate that the extent of patent thickets at the EPO has been increasing in recent years.},
thicket_def={#A, #B, References Shapiro, Overlapping Patents, Cummulative Invention, Hold-up, Unspecified Blocking Mechanism},
thicket_def_extract={The literature on patent thickets shows that several institutional arrangements allow firms to disentangle overlapping property rights - these include licensing, patent pools, standard setting as well as litigation (Shapiro, 2001, Scotchmer, 2005). There is some evidence that firms holding a large share of patents within a given technology benefit substantially from their patent portfolio and may be able to reduce the likelihood of hold-up... Secondly, the conditions under which strategic complementarity is likely to arise in our model fit our current understanding of settings in which patent thickets arise very well. These are settings in which technologies are highly complex, in which many firms seek to build large patent portfolios and in which the combination of multiple parties’ technologies yields the best standards and products... This is attributed to firms’ efforts to reduce potential hold-up by opportunistic patentees owning critical or blocking patent rights – a situation which is associated with the existence of patent thickets... To test our model we derive a new measure of complexity of blocking relationships in patent thickets.},
tags={#Core Paper},
filename={vonGraevenitz (2012) - Incidence And Growth Of Patent Thickets.pdf}
}
@article{von2011measure,
title={How to measure patent thickets -- A novel approach},
author={Von Graevenitz, G. and Wagner, S. and Harhoff, D.},
journal={Economics Letters},
volume={111},
number={1},
pages={6--9},
year={2011},
abstract={This paper provides a direct measure of the density of patent thickets based on patent citations. We discuss the algorithm that generates the measure and present descriptive results validating it. Moreover, we identify technology areas particularly affected by patent thickets.},
discipline={Econ},
research_type={Measures},
industry={General},
thicket_stance={Pro},
thicket_stance_extract={To demonstrate that the triples measure of patent thicket density is capable of identifying patent thickets, we provide three descriptive results. These have been obtained by applying our algorithm to patent filings at the EPO between 1980 and 2003. Data were taken from the PATSTAT database (”EPO},
thicket_def={#A, #B, Quotes Shapiro, References Shapiro, Overlapping Patents, Unspecified Blocking Mechanism, Hold-up},
thicket_def_extract={The combination of complex technology and high volume patenting creates patent thickets, which can be defined as dense webs of overlapping patent rights (Shapiro, 2001)... The advantage of the triples measure proposed here is that it provides a simple way of computing the density of patent thickets across technologies and at any given point in time. In this way, the measure enables researchers to analyze the effect of the threat of hold up in different technology areas on firms' patenting strategies.},
tags={#Core Paper},
filename={VonGraevenitz Wagner Harhoff (2011) - How To Measure Patent Thickets A Novel Approach.pdf}
}
@article{walsh2003effects,
title={Effects of research tool patents and licensing on biomedical innovation},
author={Walsh, John P and Arora, Ashish and Cohen, Wesley M},
journal={Patents in the Knowledge-based Economy},
volume={285},
pages={286},
year={2003},
abstract={},
discipline={Law},
research_type={Discussion},
industry={Biotech, Pharma},
thicket_stance={Weak Anti},
thicket_stance_extract={Furthermore, Geron has formed a number of nonexclusive licensing agreements for the exploitation of telomerase, typically with small biotech firms possessing complementary technology. Thus, although we again see some evidence of researchers being excluded, we do not find a failure to exploit the target.},
thicket_def={#A-T, #B-T, References Shapiro, References Heller/Eisenberg, Overlapping Patents, Cummulative Invention, Complementary Inputs, Diversely-Held, Transaction Costs},
thicket_def_extract={Heller and Eisenberg (1998) argue that biomedical innovation has become susceptible to what they call a “tragedy of the anticommons,” which can emerge when there are numerous property right claims to separate building blocks for some product or line of research. When these property rights are held by numerous claimants (especially if they are from different kinds of institutions), the negotiations necessary to their combination may fail, quashing the pursuit of otherwise promising lines of research or product development. Heller and Eisenberg suggest that the essential precondition for an anticommons — the need to combine a large number of separately patentable elements to form one product—now applies to drug development because of the patenting of gene fragments or mutations [e.g., expressed sequence tags (ESTs) and single-nucleotide polymorphisms (SNPs)] and a proliferation of patents on research tools that have become essential inputs into the discovery of drugs, other therapies, and diagnostic methods. Heller and Eisenberg (1998) argue that the combining of multiple rights is susceptible to a breakdown in negotiations or, similarly, a stacking of license fees to the point of overwhelming the value of the ultimate product. Shapiro (2000) has raised similar concerns, using the image of the “patent thicket.” He notes that technologies that depend on the agreement of multiple parties are vulnerable to holdup by any one of them, making commercialization potentially difficult.5... Furthermore, Geron has formed a number of nonexclusive licensing agreements for the exploitation of telomerase, typically with small biotech firms possessing complementary technology. Thus, although we again see some evidence of researchers being excluded, we do not find a failure to exploit the target.},
tags={#Core Paper},
filename={Walsh Arora Cohen (2003) - Effects Of Research Tool Patents And Licensing On Biomedical Innovation.pdf}
}
@article{ziedonis2004don,
title={Don't fence me in: Fragmented markets for technology and the patent acquisition strategies of firms},
author={Ziedonis, R.H.},
journal={Management Science},
volume={50},
number={6},
pages={804--820},
year={2004},
abstract={How do firms avoid being “fenced in” by owners of patented technologies used, perhaps unknowingly, in the design or manufacture of their products? This paper examines the conditions under which firms expand their own portfolios of patents in response to potential hold-up problems in markets for technology. Combining insights from transactions cost theory with recent scholarship on intellectual property and its exchange, I predict firms will patent more aggressively than otherwise expected when markets for technology are highly fragmented (i.e., ownership rights to external technologies are widely distributed); this effect should be more pronounced for firms with large investments in technology-specific assets and under a strong legal appropriability regime. Although these characteristics of firms and their external environments have been highlighted in the theoretical literature, prior research has not explored the extent to which such factors interact to shape the patenting behavior of firms. To empirically test these hypotheses, I develop a citations-based “fragmentation index” and estimate the determinants of patenting for 67 U.S. semiconductor firms between 1980 and 1994. Accumulating exclusionary rights of their own may enable firms to safeguard their investments in new technologies while foregoing some of the costs and delays associated with ex ante contracting.},
discipline={Econ},
research_type={Measures, Empirical},
industry={Semiconductor},
thicket_stance={Pro},
thicket_stance_extract={Consistent with predictions drawn from transactions cost and anticommons theories, I find that firms acquire patents more aggressively than otherwise predicted when markets for technological inputs are highly fragmented (i.e., when rights to a firm’s complementary patents are widely distributed among outside parties).},
thicket_def={#A-PST, References Shapiro, Complementary Inputs, Diversely-Held},
thicket_def_extract={Others raise similar concerns about the effects of dense “thickets” of overlapping patent claims, but predict that firms will “navigate” through these thickets by devising institutional solutions such as patent pools or joint ventures (Merges 2001, Shapiro 2001), or by acquiring firms with blocking patents (Graff et al. 2003)... the additional problems posed by multiple, fragmentary patent owners (i.e., the “patent thicket” or, more precisely, the “diffuse entitlements” problem)... A subtle but important insight from this “anticommons” (or “diffuse entitlements”) theory is that a firm’s bargaining challenge is affected by the level of dispersion among rights holders—not just by the number of patents in a “thicket” or the number of owners per se (as modeled by Shapiro 2001 and Buchanan and Yoon 2002)... Combining insights from transactions cost theory with studies of intellectual property (IP) and its exchange, I predict firms will patent more aggressively than otherwise expected when rights to complementary patents (i.e., ones that would likely be infringed if the firm manufactures or sells its products without a license) are widely distributed among outside entities... As noted earlier, the degree to which one patent’s claims infringe upon those of others is both difficult and costly to ascertain... To clarify the point, consider a hypothetical example of a semiconductor manufacturer deciding to invest $1 billion in a new fabrication facility (fab). Assume the firm has identified 1,000 patents it believes might be infringed on in the design or manufacture of its products. At this point, however, the firm is still unsure whether these patents are valid and, if so, the effective scope of their claims.},
tags={#Core Paper},
filename={Ziedonis (2004) - Dont Fence Me In.pdf}
}
Missing Papers (without pages)
@techreport{clarkson2003sharper,
title={Sharper Machetes for the Patent Thicket: Objective Criteria for Evaluating Patent Pools in the Shadow of Antitrust Enforcement},
author={Clarkson, G},
year={2003},
journal={HBS Working Paper},
abstract={},
discipline={},
research_type={},
industry={},
thicket_stance={},
thicket_stance_extract={},
thicket_def={},
thicket_def_extract={},
tags={},
filename={}
}
@article{eisenberg2001bargaining,
title={Bargaining over the transfer of proprietary research tools: is this market failing or emerging},
author={Eisenberg, Rebecca S},
journal={Expanding the boundaries of intellectual property: innovation policy for the knowledge society},
volume={226},
year={2001},
publisher={New York: Oxford University Press: pp. 226ff},
abstract={},
discipline={},
research_type={},
industry={},
thicket_stance={},
thicket_stance_extract={},
thicket_def={},
thicket_def_extract={},
tags={},
filename={}
}
@techreport{noel2006patent,
title={Patent thickets and software innovation: Theory and evidence from a panel of US firms},
author={Noel, Michael and Schankerman, Mark},
year={2006},
journal={CEPR Working Paper},
abstract={},
discipline={},
research_type={},
industry={},
thicket_stance={},
thicket_stance_extract={},
thicket_def={},
thicket_def_extract={},
tags={},
filename={}
}
@article{ziedonis2003patent,
title={Patent Litigation in the US Semiconductor Industry1},
author={Ziedonis, Rosemarie Ham},
journal={Patents in the Knowledge-Based Economy},
pages={180},
year={2003},
publisher={National Academy Press},
abstract={},
discipline={},
research_type={},
industry={},
thicket_stance={},
thicket_stance_extract={},
thicket_def={},
thicket_def_extract={},
tags={},
filename={Ziedonis (2003) - Patent Litigation In The Us Semiconductor Industry.pdf}
}
Duplicate Papers, Early or Non-Relevant Papers
@article{cockburn2006entry,
title={Entry and Patenting in the Software Industry},
author={Cockburn, I.M. and MacGarvie, M.J.},
year={2006},
journal={NBER Working Paper},
institution={National Bureau of Economic Research},
abstract={To what extent are firms kept out of a market by patents covering related technologies? Do patents held by potential entrants make it easier to enter markets? We estimate the empirical relationship between market entry and patents for 27 narrowly defined categories of software products during the period 1990–2004. Controlling for demand, market structure, average patent quality, and other factors, we find that a 10% increase in the number of patents relevant to market reduces the rate of entry by 3%–8%, and this relationship intensified following expansions in the patentability of software in the mid-1990s. However, potential entrants with patent applications relevant to a market are more likely to enter it. Finally, patents appear to substitute for complementary assets in the entry process, because patents have both greater entry-deterring and entry-promoting effects for firms without prior experience in other markets.},
discipline={Mgmt},
research_type={Empirical},
industry={Software},
thicket_stance={},
thicket_stance_extract={},
thicket_def={References Shapiro, Diversely-Held, Transaction Costs, Unspecified Blocking Mechanism},
thicket_def_extract={#A-T, #D, Many firms, nonetheless, acquire large portfolios of patents, and even where the primary motivation for doing this goes beyond the potential to exclude competitors, the impact of an accumulated patent “thicket” on entry costs may be substantial (see Shapiro 2001 for a definition of patent thickets)... As all industry participants have responded to increased incentives to obtain patents, the “thicket” in these markets has grown dramatically, imposing greater and greater transactions costs on all firms.},
tags={},
filename={Cockburn MacGarvie (2006) - Entry And Patenting In The Software Industry.pdf}
}
@article{galasso2008patent,
title={Patent Thickets and the Market for Innovation: Evidence from Settlement of Patent Disputes},
author={Galasso, A. and Schankerman, M.},
year={2008},
abstract={We study how fragmentation of patent rights (‘patent thickets’) and the formation of the Court of Appeal for the Federal Circuit (CAFC) affected the duration of patent disputes, and thus the speed of technology diffusion through licensing. We develop a model of patent litigation which predicts faster settlement agreements when patent rights are fragmented and when there is less uncertainty about court outcomes, as was associated with the ‘pro-patent shift’ of CAFC. The model also predicts that the impact of fragmentation on settlement duration should be smaller under CAFC. We confirm these predictions empirically using a dataset that covers nearly all patent suits in U.S. federal district courts during the period 1975-2000. Finally, we analyze how fragmentation affects total settlement delay, taking into account both reduction in duration per dispute and the increase in the number of required patent negotiations associated with patent thickets.},
discipline={Econ},
research_type={Empirical},
industry={General},
thicket_stance={Anti},
thicket_stance_extract={This paper investigates how fragmentation of patent rights (‘patent thickets’) and the formation of the Court of Appeal for the Federal Circuit (CAFC) affected the duration of patent disputes, and thus the speed of technology diffusion through licensing.... There are two main empirical findings. First, patent disputes in U.S. district courts are settled more quickly when infringers require access to fragmented external rights, but this effect is much weaker after the introduction of CAFC. Second, the introduction of CAFC is associated with a direct and large reduction on the duration of disputes, which the model attributes to less uncertainty about the outcome if the dispute goes to trial. In addition, our calculations suggest that fragmentation may have reduced total negotiation delay, and thus sped up rather 28 than retarded technology diffusion, in some technology areas during the period before CAFC.},
thicket_def={#A-T, References Shapiro, References Heller/Eisenberg, Complementary Inputs, Diversely-Held, Transaction Costs},
thicket_def_extract={...are the fragmentation of patent rights (often referred to as ‘patent thickets’)... These two effects help reconcile the two opposing views on patent thickets in the recent economic and legal literature — the pro-diffusion view of Licthman (2006) and the anti-commons view of Heller and Eiseberg (1998) and Shapiro (2001)... This result is consistent with the ‘anti-commons’ view: thickets powerfully increase transaction costs and reduce the speed of technology diffusion.},
tags={},
filename={Galasso Schankerman (2008) - Patent Thickets And The Market For Innovation.pdf}
}
@article{hall2005note,
title={A note on the bias in Herfindahl-type measures based on count data},
author={Hall, B.H.},
journal={Revue D' Economie Industrielle, Paris Editions, Techniques Et Economiques},
volume={110},
pages={149},
year={2005},
abstract={A Herfindahl index of constructed from shares based on count data where the number of counts is small will generally be biased downward because of the statistical properties of count data and Jensen’s inequality. This note suggests a simple correction for the bias and illustrates its applicability when using measures based on patent data and patent citation data.},
discipline={Econ},
research_type={Measures},
industry={},
thicket_stance={},
thicket_stance_extract={},
thicket_def={},
thicket_def_extract={},
tags={},
filename={Hall (2005) - A Note On The Bias In Herfindahl Type Measures Based On Count Data.pdf}
}
@article{siebert2008does,
title={Does Licensing Resolve Hold Up in the Patent Thicket?},
author={Siebert, R. and Graevenitz, G.},
year={2008},
abstract={In a patent thicket licensing provides a mechanism to either avoid or resolve hold up. We study the choice between ex ante licensing to avoid hold up and ex post licensing to resolve it. Firms’ choice of licensing contract is studied in the context of a patent portfolio race. We show that high expected blocking leads to ex ante licensing while ex post licensing arises if expected blocking is low but realized blocking is high. Also, ex ante licensing reduces firms’ R&D incentives. A sample selection model of licensing is derived from the theoretical model. In this framework theoretical predictions on effects of blocking are tested with data from the semiconductor industry. We show that licensing helps firms to resolve blocking. However, licensing is not a cure all: it decreases as fragmentation of property rights increases and arises mainly between large firms with similar market shares. Using a treatment effects model we also confirm the prediction that ex ante licensing reduces the level of R&D investment.},
discipline={Econ},
research_type={Empirical},
industry={semiconductor},
thicket_stance={Pro},
thicket_stance_extract={This also indicates that the ”freedom to operate” explanation of licensing is central to understand licensing in patent thickets. Interestingly the size of firms’ patent portfolios does not affect their propensity to license. However it does affect firms’ patenting levels. Finally, we find that the fragmentation of patent rights reduces firms’ propensity to license ex ante and ex post. Thus a deepening of 36 patent thickets resulting from more complex blocking relationships seems to undermine the usefulness of licensing to resolve blocking.},
thicket_def={#A-T, #B-T, References Shapiro, Complementary Inputs, Diversely-Held, Transaction Costs, Cummulative Invention, Hold-up, Strategic Patenting (Bad)},
thicket_def_extract={In a patent thicket licensing provides a mechanism to either avoid or resolve hold up... In some high technology industries the process of research and development is comparable to the continuous extension of a pyramid through the addition of new building blocks at the top [Shapiro (2001)]. Here, the pyramid serves as a metaphor for the cumulativeness of scientific research in complex product industries.1 Firms increasingly protect their contributions to this pyramid with patents. As a result several high technology industries are now affected by a “patent thicket” [Heller and Eisenberg (1998); Hall and Ziedonis (2001); Shapiro (2001)]. In a patent thicket many rival firms hold patents protecting components of a single technology. Whenever a firm uses such a technology it is vulnerable to hold up by firms holding blocking patents [Grindley and Teece (1997), Jaffe (2000), Shapiro (2001)]. The threat posed by blocking patents frequently induces firms to build up a large portfolio of patents. This creates a strong bargaining position for the firm owning the portfolio in any disputes with rivals. In a patent thicket all firms face the prospect of hold up and have strong incentives to patent, which perpetuates the patent thicket. Hold up in a patent thicket may be resolved through licensing of blocking patents.},
tags={},
filename={Siebert Graevenitz (2008) - Does Licensing Resolve Hold Up In The Patent Thicket.pdf}
}
