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@article{aggarwal2009modes,
jstor_articletype = {research-article},
title = {Modes of Cooperative R&D Commercialization by Start-Ups},
author = {Aggarwal, Vikas A. and Hsu, David H.},
journal = {Strategic Management Journal},
jstor_issuetitle = {},
volume = {30},
number = {8},
jstor_formatteddate = {Aug., 2009},
pages = {pp. 835-864},
url = {http://www.jstor.org/stable/20536081},
ISSN = {01432095},
abstract = {This study empirically examines the determinants of heterogeneous firm-level cooperative R&D commercialization strategies. While the volume of interfirm collaboration has increased dramatically in recent decades, the determinants of firm-level choices among alternate modes of such cooperative activity remain relatively understudied. We develop a conceptual model of factors determining collaborative mode choice at the organizational portfolio level. These factors include the firm-level appropriation environment, in which deal-level choices have portfolio-level spillover implications, as well as governance capabilities developed by the firm over time. Using a random sample of innovating biotechnology start-ups, we assemble a firm-year panel dataset that aggregates transaction-level collaboration data to the firm-year level, allowing us to characterize firms' portfolios of collaborative deals. We find broad empirical support for our model, suggesting that a firm's appropriation environment and governance capabilities strongly influence portfolio-level collaboration mode choices. In addition, we explore the implications of governance capability development, finding that experience with particular modes, as well as deviations from existing capabilities, impact firm valuation.},
language = {English},
year = {2009},
publisher = {Wiley},
copyright = {Copyright © 2009 Wiley},
filename={Aggarwal Hsu (2009) - Modes Of Cooperative R And D Commercialization By Start Ups.pdf}
}
Econ: Empirical Biotech
Biotech: all firms in Standard Industrial Classification
(SIC) codes 2833–2836 located in the United
States that have conducted an initial public offering
(IPO)17 in the past 25 years. From this list of
468 firms, we randomly select 117 for our sample.
A firm’s patent portfolio can enable the
firm to mitigate appropriation concerns that arise
across multiple deals. This occurs when patents
are not specific to an individual deal, but rather
apply across multiple technology commercialization
projects. Such an intellectual property portfolio
can thus act as a ‘patent thicket’ (Shapiro,
2000), making it more difficult for collaborative
partners to expropriate the innovating firm’s technology.
11 The degree of protection afforded by
such a portfolio will, of course, necessarily be
dependent on the degree to which patents are relevant
across multiple commercialization projects.
While the prior literature has discussed patent thickets in
the context of fragmented markets for intellectual property, we
conceptualize an analogous situation with the innovator holding
a stock of interrelated patents that deters potential expropriation
of a range of related products, a situation especially relevant
for start-up innovators, as most such firms confine their product
development to a single or small number of related products for
resource reasons.
@article{aoki2008promoting,
title={Promoting access to intellectual property: patent pools, copyright collectives, and clearinghouses},
author={Aoki, R. and Schiff, A.},
journal={R\&d Management},
volume={38},
number={2},
pages={189--204},
year={2008},
publisher={Wiley Online Library},
filename={Aoki Schiff (2008) - Promoting Access To Intellectual Property.pdf}
}
Econ: Theory: Pools, Collectives, Clearinghouses. ICT and Biotech.
In the context of patents, a proliferation of IP
rights may result in a ‘patent thicket’ (Shapiro,
2001) that can increase costs for downstream
activities such as cumulative innovation and the
development of new products that combine multiple
existing innovations.
For example, development of a new
genetic diagnostic test typically requires licenses
to a number of patents on gene sequences and
related technologies (Scherer, 2002). The greater
the number of licenses required, the greater the
cost of developing the new test. This paper is
concerned with ways in which these costs can be
reduced so that markets for technology can function
more efficiently.
@article{baron2010patent,
title={Patent quality and value in discrete and cumulative innovation},
author={Baron, J. and Delcamp, H.},
journal={CERNA Working Paper},
number={2010-07},
year={2010},
filename={Baron Delcamp (2010) - Patent Quality And Value In Discrete And Cumulative Innovation.pdf}
}
Econ: Empirical: Patent quality and value in discrete vs. cummulative innovation
Patent thickets are webs of overlapping and mutually blocking patents held by different
owners. Mutually blocking patent rights result from cumulative innovation, where no
technological component can be marketed individually without the technological
complements potentially protected by patent rights of different companies.
@article{bergman2007global, title={The global stem cell patent landscape: implications for efficient technology transfer and commercial development}, author={Bergman, K. and Graff, G.D.}, journal={Nature biotechnology}, volume={25}, number={4}, pages={419--424}, year={2007}, publisher={Nature Publishing Group}, filename={Bergman Graff (2007) - The Global Stem Cell Patent Landscape.pdf} } Biology: Stem Cells (could give rise to thickets) Given the particular characteristics of stemcells as a broadly enabling technology, manyexpect the field to be particularly susceptibleto the emergence of a patent thicket8–13, alsoknown in property rights theory as an ‘anticommons’14. In a patent thicket, the existenceof many overlapping patent claims can causeuncertainty about freedom to operate, imposemultiple layers of transaction costs and stackroyalty payments beyond levels that can besupported by the value of single innovations.By blocking pathways to market and dampeninginvestor interest in commercialization,a patent thicket has the potential to slow andskew the overall development of new technicalapplications.
@article{braun2007barriers, title={Barriers to user innovation: moving towards a paradigm of'licence to innovate'?}, author={Braun, V. and Herstatt, C.}, journal={International Journal of Technology, Policy and Management}, volume={7}, number={3}, pages={292--303}, year={2007}, publisher={Inderscience}, filename={Braun Herstatt (2007) - Barriers To User Innovation.pdf} } Econ: Discussion based on seed-breeding An investigation of the barriers that users face when attempting to innovate is nevertheless lacking completely. In this paper, we attempt to fill this gap by discussing various factors that can prevent users from innovating. The evolution of the seed-breeding industry will be used for illustration purposes. We will argue that the barriers to user innovation seem to be progressing, potentially indicating that a paradigm change may be imminent. This refers to an overlapping set of IPRs, which requires those seeking to commercialise new technologies to obtain licences (Shapiro, 2001). It exists in many industries, such as in semiconductors and biotechnology (Hall and Ziedonis, 2001; Heller and Eisenberg, 1998). @article{brenner2009optimal, title={Optimal formation rules for patent pools}, author={Brenner, S.}, journal={Economic Theory}, volume={40},
@article{burk2003policy,
title={Policy levers in patent law},
author={Burk, D.L. and Lemley, M.A.},
journal={Va. L. Rev.},
volume={89},
pages={1575},
year={2003},
publisher={HeinOnline},
filename={Burk Lemley (2003) - Policy Levers In Patent Law.pdf}
}
Law: Theory - Direct discussion of thicket problem
Closely related to the problem of complementarity is the prob- lem of horizontal overlaps between patents.122 Patents are fre- quently broader than the products the inventors actually make. Multiple patents often cover the same ground, sometimes as an in- tentional result of the patent system"' and sometimes because pat- ents regularly issue that are too broad or tread on the prior art.'24 Various parties may be able to lay claim to the same technologies or to aspects of the same technology. Carl Shapiro has termed this overlap of patent claims the "patent thicket." 125
@article{grindley1997licensing,
@article{hall2007patents, title={Patents and patent policy}, author={Hall, B.H.}, journal={Oxford Review of Economic Policy}, volume={23}, number={4}, pages={568--587}, year={2007}, publisher={Oxford Univ Press}, filename={Hall (2007) - Patents And Patent Policy.pdf} } Econ: Patents Barely mentions thickets, but sets the stage well. During the U.S. Federal Trade Commission/Department of Justice hearings on the patent systemand antitrust policy in 2002, a number of industry representatives expressed concerns about thedifficulty of negotiating the patent thicket in their area and the risk of being “held-up” ex post bya patent on a technology that was only a small component of their product. This complaint washeard largely from those in the complex product industries (the ICT sector), such as Robert Barr,then Vice-President for Intellectual Property and Worldwide Patent Counsel at CiscoCorporation. He described two types of problems faced by firms in the sector: the first being thelarge stockpiling of patents necessary as a defensive measure against others in the industry andthe second being the threat posed by small entities that have nothing at risk themselves and maynot even be producers. The first of the problems Barr describes is clearly a case of mutually assured destruction thatleaves the firms in question no better (and no worse) off than if they were not accumulatingmassive numbers of patents for defensive purposes, and yet at the same time is a very costlystrategy. @article{hall2012study,
@article{heller1998thetragedy,
@article{kieff2011removing, jstor_articletype = {research-article}, title = {Removing Property from Intellectual Property and (Intended?) Pernicious Impacts on Innovation and Competition}, author = {Kieff, F. Scott}, journal = {Supreme Court Economic Review}, jstor_issuetitle = {}, volume = {19}, number = {1}, jstor_formatteddate = {January 2011}, pages = {pp. 25-50}, url = {http://www.jstor.org/stable/10.1086/664561}, ISSN = {07369921}, abstract = {Commentators have poured forth a loud and sustained outcry over the past few years that sees property rule treatment of intellectual property (IP) as a cause of excessive transaction costs, thickets, anticommons, hold-ups, hold-outs, and trolls, which unduly tax and retard innovation, competition, and economic growth. The popular response has been to seek a legislative shift towards some limited use of weaker, liability rule treatment, usually portrayed as “just enough” to facilitate transactions in those special cases where the bargaining problems are at their worst and where escape hatches are most needed. This essay is designed to make two contributions. First, it shows how a set of changes in case law over just the past few years have hugely re-shaped the patent system from having several major, and helpful, liability-rule pressure-release valves, into a system that is fast becoming almost devoid of significant property rule characteristics, at least for those small entities that would most need property rule protection. The essay then explores some harmful effects of this shift, focusing on the ways liability rule treatment can seriously impede the beneficial deal-making mechanisms that facilitate innovation and competition. The basic intuition behind this bad effect of liability rules is that they seriously frustrate the ability for a market-challenging patentee to attract and hold the constructive attention of a potential contracting party (especially one that is a larger more established party) while preserving the option to terminate the negotiations in favor of striking a deal with a different party. At the same time, liability rules can have an additional bad effect of helping existing competitors to coordinate with each other over ways to keep out new entrants. The essay is designed to contribute to the literature on IP in particular, as well as the broader literatures on property and coordination, by first showing how a seemingly disconnected set of changes to the legal rules impacting a particular legal regime like the patent system can have unintended and sweeping harmful consequences, and then by exploring why within the more middle range of the spectrum between the two poles of property rules and liability rules, a general shift towards the property side may be preferred by those seeking an increase in access and competition.}, language = {English}, year = {2011}, publisher = {The University of Chicago Press}, copyright = {Copyright © 2011 The University of Chicago Press}, filename={Kieff (2011) - Removing Property From Intellectual Property And Intended.pdf} } Law: Property rules and legal regime The essay isdesigned to contribute to the literature on IP in particular,as well as the broader literatures on property and coordination,by fi rst showing how a seemingly disconnected set ofchanges to the legal rules impacting a particular legal regimelike the patent system can have unintended and sweepingharmful consequences, and then by exploring why within themore middle range of the spectrum between the two poles ofproperty rules and liability rules, a general shift towards theproperty side may be preferred by those seeking an increase inaccess and competition. In the vast majority of the intellectual property (IP) literature,property rule treatment of IP is said to cause excessive transactioncosts, thickets, anticommons, hold-ups, hold- outs, and trolls,unduly taxing and retarding innovation, competition, and economicgrowth.5 The popular view of IP for the past several years has beenthat property rule treatment is stopping deals from getting done, leavingdesired users of IP subject matter unable to engage in suffi cientproductive activities.
@article{kwon2012patent, title={Patent Thicket, Secrecy, and Licensing}, author={Kwon, I.}, journal={The Korean Economic Review}, volume={28}, number={1}, pages={27--49}, year={2012}, filename={Kwon (2012) - Patent Thicket Secrecy And Licensing.pdf} } Econ: Theory: Race for complementary patents However, as new productsincreasingly depend on more complex and complementary technologies, there existgrowing concerns that stronger patent protection may allow a single patent holderto prevent other firms from commercializing all their new products that rely on thatpatent, and discourage innovation as a consequence, called the hold-up problem (e.g.,Hall and Ziedonis 2001, Parchomovsky and Wagner 2005, Shapiro 2001) Note, however, that such hold-up problems can be solved or significantlydiminished through licensing contracts, because the owners of complementarypatents stand to lose their profits under the hold-up situation. Then, one can arguethat with licensing contracts, stronger patent protection should encourageinnovation even when firms compete for complementary patents, called a patentthicket. @article{lanjouw2004protecting, jstor_articletype = {research-article}, title = {Protecting Intellectual Property Rights: Are Small Firms Handicapped?}, author = {Jean O. Lanjouw and Mark Schankerman}, journal = {Journal of Law and Economics}, jstor_issuetitle = {}, volume = {47}, number = {1}, jstor_formatteddate = {April 2004}, pages = {pp. 45-74}, url = {http://www.jstor.org/stable/10.1086/380476}, ISSN = {00222186}, abstract = {Abstract This paper studies the determinants of patent suits and settlements during 1978–99 by linking information from the U.S. patent office, the federal courts, and industry sources. We find that litigation risk is much higher for patents that are owned by individuals and firms with small patent portfolios. Patentees with a large portfolio of patents to trade, or other characteristics that facilitate “cooperative” resolution of disputes, are much less likely to prosecute infringement suits. However, postsuit outcomes do not depend on these characteristics. These findings show that small patentees are at a significant disadvantage in protecting their patent rights because their greater litigation risk is not offset by more rapid resolution of their suits. Our empirical estimates of the heterogeneity in litigation risk can help in developing private patent litigation insurance to mitigate the adverse affects of high enforcement costs.}, language = {English}, year = {2004}, publisher = {The University of Chicago Press for The Booth School of Business of the University of Chicago and The University of Chicago Law School}, copyright = {Copyright © 2004 The University of Chicago}, filename={Lanjouw Schankerman (2004) - Protecting Intellectual Property Rights Are Small Firms Handicapped.pdf} } Law/Econ: Empirical: Patent litigation incidence Thicket in footnote only We find that litigation risk is much higher for patents that are owned byindividuals and firms with small patent portfolios. Patentees with a large portfolioof patents to trade, or other characteristics that facilitate “cooperative” resolution ofdisputes, are much less likely to prosecute infringement suits. However, postsuitoutcomes do not depend on these characteristics. These findings show that smallpatentees are at a significant disadvantage in protecting their patent rights becausetheir greater litigation risk is not offset by more rapid resolution of their suits.
@article{lemley2005patenting,
title={Patenting nanotechnology},
author={Lemley, M.A.},
journal={Stanford Law Review},
pages={601--630},
year={2005},
publisher={JSTOR},
filename={Lemley (2005) - Patenting Nanotechnology.pdf}
}
Law: Discussion: Nanotech
Some fear that ownership of nanotechnology patents is too fragmented, risking the development of a patent "thicket."77 Miller offers several examples of nanoscale technologies that have overlapping patents covering the same basic invention, including the carbon nanotube and semiconducting nanocrystals.78 Others point to similar overlaps involving drug delivery nanoparticles.7 Further, companies that want to use nanotechnology to produce products may need to use a range of different building-block inventions - for example, using patented atomic force microscopes to detect and align atoms into patented materials that are then manipulated into patented structures used in constructing a patented end product. If each step has one or perhaps several different patents, all owned by different people, the company will need a lot of licenses.
@article{lemley2005probabilistic,
title={Probabilistic Patents},
author={Lemley, M.A. and Shapiro, C.},
journal={The Journal of Economic Perspectives},
volume={19},
number={2},
pages={75--98},
year={2005},
publisher={JSTOR},
filename={Lemley Shapiro (2005) - Probabilistic Patents.pdf}
}
Econ: Theory: Probabilistic Patents!
Patent owners also improve their chance of winning the patent lottery by filing
multiple patents on closely related technologies, thereby increasing the chance that
their patents will cover technology that becomes widely adopted by market participants.
In a number of key industries, particularly semiconductors (Hall and
Ziedonis, 2001) and computer software (Bessen and Hunt, 2004), companies file
numerous patent applications on related components that are integrated into a
single functional product. The result is a "patent thicket," in which hundreds of
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82 Journal of Economic Perspectives
patents can apply to a single product (Shapiro, 2001; FTC, 2003). If the holder of
a large patent portfolio asserts its patents against another company and claims that
the other company is infringing dozens or even hundreds of its patents, the target
company faces a very complex and costly undertaking if it chooses to fight all of
those patent infringement claims in court, knowing that it has to win all or nearly
all of the individual patent cases to avoid paying significant royalties or even being
enjoined from selling its product (Parchomovsky and Wagner, 2004).
Similarly, patent thickets can have deleterious effects on both competition and
innovation. One way to cut through the patent thicket is for incumbents with
extensive patent portfolios to enter into broad cross-licenses (that is, exchanges of
roughly symmetric patent positions) to "clear" the thicket. However, new entrants
who lack large patent portfolios may be at a major disadvantage in this situation
because they have no patents to trade. Without such cross-licenses, the result is
inefficient "royalty stacking," in which a manufacturer without its own patent
portfolio must pay royalties to a number of separate companies.6 Defensive patenting
is a natural, even inevitable, strategy in industries with patent thickets, but
defensive patenting itself can increase the density of the thicket.
@article{lemley2006patent,
title={Patent holdup and royalty stacking},
author={Lemley, M. and Shapiro, C.},
year={2006},
filename={Lemley Shapiro (2006) - Patent Holdup And Royalty Stacking.pdf}
}
Econ: Theory: Royalty stacking and hold-up
We have occasionally seen problems like this before, see Ted Sabety, Nanotechnology Innovation and
the Patent Thicket: Which IP Policies Promote Growth?, 15 Alb. L.J. Sci. & Tech. 477, 495-503 (2005)
(discussing example of radio patents in the 1920s), but they are much more common now than in the past.
Royalty stacking, patent thickets, and the related “anti-commons” problem have been a source of
concern in the semiconductor and biotechnology industries for some time.38 While the precise
extent of these problems remains unclear, empirical evidence of has mounted that royalty
stacking is far more than a theoretical possibility.
@article{liu2008internal, title={Internal sequential innovations: How does interrelatedness affect patent renewal?}, author={Liu, K. and Arthurs, J. and Cullen, J. and Alexander, R.}, journal={Research Policy}, volume={37}, number={5}, pages={946--953}, year={2008}, publisher={Elsevier}, filename={Liu (2008) - Internal Sequential Innovations.pdf} } However, research often assumes that a firm’s patentedinnovations are independent from each other.We draw upon evolutionary economics andsuggest that some of a firm’s patents share important genealogical relationships, which werefer to as internal sequential innovations. With thepower of the intellectual regime, internal sequential innovationsoffer a larger thicket of protection that can definethe underlying technologies in a set of overlapping patents.That is, a sequence of patents revolving around the sametechnological trajectory can define the intellectual propertymore precisely and protect it with an enlarged degreeof coverage. The holder of such patented innovations canthereafter exclude competitors from the collective scope ofthe claims laid out in all of the sequential patents (Wagnerand Parchomovsky, 2005). @techreport{llanes2009anticommons, title={Anticommons and optimal patent policy in a model of sequential innovation}, author={Llanes, G. and Trento, S.}, year={2009}, institution={Harvard Business School}, filename={Llanes Trento (2009) - Anticommons And Optimal Patent Policy In A Model Of Sequential Innovation.pdf} } Econ: Theory: Sequential innovation model with a thicket As the number of inputs needed in research increases, the innovatorfaces a patent thicket and is threatened by the possibility ofhold-up, namely the risk that a useful innovation is not developed becauseof lack of agreement with the patent holders. This problem hasbeen dubbed the tragedy of the anticommons (Heller 1998, Heller andEisenberg 1998). @article{macdonald2004means,
@article{meniere2008patent, title={Patent law and complementary innovations}, author={M{\'e}ni{\`e}re, Y.}, journal={European Economic Review}, volume={52}, number={7}, pages={1125--1139}, year={2008}, publisher={Elsevier}, filename={Meniere (2008) - Patent Law And Complementary Innovations.pdf} } Econ: Theory: Model of complementary patent innovation It is alsovery frequent in ICT industries such as electronics, computer hardware and soft-ware, where ?rms have to navigate "patent thickets" (Shapiro, 2001) As regards complementary innovations, the optimal patenting rule dependson a trade-o¤ between the pro?t loss due to scattered complementary patents,and the possible bene?t of patent disclosure. The scattering of complementarypatents between di¤erent owners creates a double marginalization issue. Sinceeach patentee behaves as a monopolist, the Cournot (1838) theorem predictsthat prices do not maximize the ?rms?pro?ts (Shapiro, 2001; Lerner & Tirole,2005)1 . The requirement that complementary innovations be bundled prior topatenting can be a way to prevent this pro?t loss. However, small innovations arenot disclosed when innovations have to be bundled prior to patenting (Scotchmerand Green, 1990). As a result, ?rms lose the possibility to quit the race after a?rst innovation has been patented, which leads to R&D cost duplications.I show that patent disclosure has a positive social e¤ect, although it does notpermit a fully e¢ cient coordination between ?rms. In this context, bundlinginnovations prior to patenting can be more e¢ cient if innovations can be devel-oped quickly. As I argue in the Conclusion, this condition is consistent with thelegal de?nition of the "inventive step" patentability requirement.
@article{paredes2006written,
title={Written Description Requirement in Nanotechnology: Clearing a Patent Thicket},
author={Paredes, J.P.},
journal={J. Pat. \& Trademark Off. Soc'y},
volume={88},
pages={489},
year={2006},
publisher={HeinOnline},
filename={Paredes (2006) - Written Description Requirement In Nanotechnology.pdf}
}
Law: Nanotech: written description requirement
The
notion of a patent thicket is where an
overlapping set of patent rights requires
that those seeking to commercialize new
technology obtain licenses from multiple
patentees.6 If you get monopoly rights
down at the bottom, "you may stifle competition
that uses those patents later on
and so the breadth and utilization of
patent rights can be used not only to stifle
competition, but also have adverse effects
in the long run on innovation."7
Moreover, the quality of these
nanotechnology patents has been repeatedly
called into question," so the navigation
of a patent thicket will have to be
around these questionable patents.
One of the policy purposes of the written
description requirement has been the quid
pro quo of the patent bargain, which
requires the patentee to describe the
invention in such terms that any person
skilled in the art to which it pertains may
construct and use it after expiration of the
patent .6
became more clear that the
purpose of the written description
requirement is to "ensure that the scope of
the right to exclude, as set forth in the
claims, does not overreach the scope of
the inventor's contribution to the field of
art as described in the patent specification."
@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},
publisher={Elsevier},
filename={Reitzig Henkel Heath (2007) - On Sharks Trolls And Their Patent Prey.pdf}
}
Econ: Theory: Trolls
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.
The strategy of “being infringed” as pursued by trolls is a
different phenomenon. While not entirely new(see Section 4.1, quoting
Lemelson versus Mattel), the broad systematic use of troll strategies
appears to be very recent, however.
@article{rey2012abuse,
title={Abuse of dominance and licensing of intellectual property},
author={Rey, P. and Salant, D.},
journal={International Journal of Industrial Organization},
year={2012},
publisher={Elsevier},
filename={Rey Salant (2012) - Abuse Of Dominance And Licensing Of Intellectual Property.pdf}
}
Econ: Theory: Underlying theory of thickets
Patent thickets, layers of licenses a �rm needs to be able to o�er products that embodytechnologies owned by multiple �rms, and licensing policies have drawn increasingscrutiny from policy makers. Patent thickets involve complementary products, whichgives rise to double marginalization { the so-called royalty stacking problem { and hasthe potential to retard di�usion of new technologies and reduce consumer welfare.1 One is the patent thicket problem,which is an extension of Cournot's 1838 complementary product oligopoly model toIP.5 When there are two or more owners of essential IP, each fails to take into accountthe impact of its licensing policy on the owners of complementary IP; this results indouble-marginalization Patent thickets have long been a concern due to the potential for delaying deploymentof products and adversely a�ecting consumers. To examine the implications of suchpatent thickets, we consider a model in which the upstream IP owner or owners sellinto a market in which there are di�erentiated products and positive �xed entry costs.It is well known that, in the absence of vertical licensing agreements, there can beexcessive entry, due to business stealing e�ects, or insu�cient entry, if �rms enteringthe market appropriate only part of the surplus they generate. We revisit this issue,taking into account the upstream owner(s)' licensing policy @inproceedings{rubinfeld2004strategic, title={The strategic use of patents: Implications for antitrust}, author={Rubinfeld, D.L. and Maness, R.}, booktitle={Antitrust, Patent and Copyright Conference}, year={2004}, filename={Rubinfeld Maness (2004) - The Strategic Use Of Patents Implications For Antitrust.pdf} } Law: Creating a thicket to raise rivals cost To see more specifically how a firm could use a large patent portfolio to raise rivals’costs, consider the case of a differentiated product oligopoly where innovation and productdesign are important elements of competition among rivals. In this case, a firm with a largepatent portfolio surrounding competitors’ key technologies (i.e., a “patent thicket”) has theopportunity to use its patent portfolio to lessen competition in the final goods market.17 @article{sabety2004nanotechnology, title={Nanotechnology innovation and the patent thicket: Which IP policies promote growth}, author={Sabety, T.}, journal={Alb. LJ Sci. \& Tech.}, volume={15}, pages={477}, year={2004}, publisher={HeinOnline}, filename={Sabety (2004) - Nanotechnology Innovation And The Patent Thicket.pdf} } Law: Thickets in nanotech (comparison with radio industry) Yet, several commentators have raised concernsthat the extraordinary pace of patenting of nanotechnology5will result in a patent deadlock6 that will stifle innovation andimpede economic growth.7 @article{santore2010patent, jstor_articletype = {research-article}, title = {Patent Pools as a Solution to Efficient Licensing of Complementary Patents? Some Experimental Evidence}, author = {Rudy Santore and Michael McKee, and David Bjornstad}, journal = {Journal of Law and Economics}, jstor_issuetitle = {}, volume = {53}, number = {1}, jstor_formatteddate = {February 2010}, pages = {pp. 167-183}, url = {http://www.jstor.org/stable/10.1086/600078}, ISSN = {00222186}, abstract = {Abstract Production requiring licensing groups of complementary patents implements a coordination game among patent holders, who can price patents by choosing among combinations of fixed and royalty fees. Summed across patents, these fees become the total producer cost of the package of patents. Royalties, because they function as excise taxes, add to marginal costs, resulting in higher prices and reduced quantities of the downstream product and lower payoffs to the patent holders. Using fixed fees eliminates this inefficiency but yields a more complex coordination game in which there are multiple equilibria, which are very fragile in that small mistakes can lead the downstream firm to not license the technology, resulting in inefficient outcomes. We report on a laboratory market investigation of the efficiency effects of coordinated pricing of patents in a patent pool. We find that pool-like pricing agreements can yield fewer coordination failures in the pricing of complementary patents.}, language = {English}, year = {2010}, publisher = {The University of Chicago Press for The Booth School of Business of the University of Chicago and The University of Chicago Law School}, copyright = {Copyright © 2010 The University of Chicago}, filename={Santore McKee Bjornstad (2010) - Patent Pools As A Solution To Efficient Licensing Of Complementary Patents.pdf} } Law/Econ: Theory with Empircs: patent pools More recently, a National Academy of Sciences (2006) committee studied the issue,concluding that even though evidence of blocking or market failures has yet to emerge, the anticommonsor patent thickets may well emerge as profit opportunities in biomedical markets grow Shapiro (2001) broadens the concept as a “patent thicket” inwhich possible outcomes include excessively high fees for the use of the patent set, uncertaintyregarding potential patent infringement, and, in the limit, holdup problems. @article{sanyal2005peanut, jstor_articletype = {research-article},
@article{schmidt2008complementary,
title={Complementary Patents and Market Structure},
author={Schmidt, K.},
year={2008},
publisher={CEPR Discussion Paper No. DP7005},
filename={Schmidt (2008) - Complementary Patents And Market Structure.pdf}
}
Econ: Theory: Model of complementary patent problems
Thus, if a downstream firm wants to produce goods that are based
on the standard it requires access to each of the essential patents. All the patents are perfect
complements. Therefore each of the upstream IP holders has monopoly power over the
downstream market. This “patent thicket” (Shapiro, 2001) gives rise to a complements
problem: each patent holder does not internalize the negative external effect on the revenues
of the other patent holders when setting his royalties, so the sum of all royalties will be
inefficiently high. In addition, there is a vertical double marginalization problem if firms on
the downstream market have market power. These externalities affect not only the prices
charged downstream, they also affect the incentives to enter the downstream market with new
product varieties and to develop new technology that improves the quality of the standard.
@article{schneider2008fences,
title={Fences and competition in patent races},
author={Schneider, C.},
journal={International Journal of Industrial Organization},
volume={26},
number={6},
pages={1348--1364},
year={2008},
publisher={Elsevier},
filename={Schneider (2008) - Fences And Competition In Patent Races.pdf}
}
Econ: Theory: Fencing with substitutes
This paper studies the behaviour of ?rms facing the decision to cre-
ate a patent fence, de?ned as a portfolio of substitute patents. We set
up a patent race model, where ?rms can decide either to patent their
inventions, or to rely on secrecy. It is shown that ?rms build patent
fences, when the duopoly pro?ts net of R&D costs are positive. We
also demonstrate that in this context, a ?rm will rely on secrecy when
the speed of discovery of the subsequent invention is high compared
to the competitor?s. Furthermore, we compare the model under the
First-to-Invent and First-to-File legal rules. Finally, we analyze the
welfare implications of patent fences.
However, ?rms patent for di¤erent reasons in ?discrete? product
industries, in which an invention can be protected by a limited number of
patents and in ?complex?product industries, where a single patent is not
enough to protect an invention. More precisely, ?rms will patent a coherent
group of inventions, which form what is sometimes called a patent "bulk",
aimed at protecting one product. The "bulk" can either be a "fence" of
substitute patents or a "thicket" of complementary patents (see Reitzig, 2004
and Cohen et al., 2000).
While the issue of "thickets" of complementary technologies in cumula-
tive innovations has been extensively analyzed2, as well as the institutional
solutions to overcome this problem (Lerner and Tirole, 2005 and Shapiro,
2001), little attention has been paid to fencing patents so far.
@article{shapiro2003antitrust, title={Antitrust limits to patent settlements}, author={Shapiro, C.}, journal={RAND Journal of Economics}, pages={391--411}, year={2003}, publisher={JSTOR}, filename={Shapiro (2003) - Antitrust Limits To Patent Settlements.pdf} } Patents, patent litigation, and patent settlements increasingly influence competition. Settlementsofpatent disputesc ome in manyforms,i ncludingl icensing and cross-licensinga greementsp, atentpools, mergers, and joint ventures. While frequently procompetitive, such settlements can stiflecompetition and harm consumers. I propose a specific antitrust rule limiting such settlements: asettlement must leave consumers at least as well off as they would have been from ongoing patentlitigation. After establishing that profitable settlements satisfying this constraint generally exist,I show how this antitrust rule can be used to evaluate three types of settlements: mergers, patentpools, and negotiated entry dates. Making matters even more complex, many products can potentially infringe multiple patents. Asdescribed in Shapiro (2001), more and more companies are facing a patent thicket requiring themto obtain multiple licenses to bring their products safely to market. @article{siebert2006jostling, title={Jostling for advantage: Licensing and entry into patent portfolio races},
@article{taylor2003american,
title={American Patent Policy, Biotechnology, and African Agriculture: The Case for Policy Change},
author={Taylor, M.R. and Cayford, J.},
journal={Harv. JL \& Tech.},
volume={17},
pages={321},
year={2003},
publisher={HeinOnline},
filename={Taylor Cayford (2003) - American Patent Policy Biotechnology And African Agriculture.pdf}
}
Law: Effect of thickets on biotech for developing nations
According to one commentator writing about biotechnology
patents in the pharmaceutical field, “[w]ith cumulative
innovation and multiple blocking patents, stronger patent rights can
have the perverse effect of stifling, not encouraging, innovation.”71
(“PTO”) have created what some call a “patent
thicket” around biotechnology and how the PTO’s pro-patent culture
affects the proliferation of patents. We then identify policies affecting
access to patented technology and U.S. foreign policy on patents,
which may have more long-term impact on access to biotechnology in
developing countries than the PTO’s domestic patenting practices
@article{tullis2005application,
title={Application of the Government License Defense to Federally Funded Nanotechnology Research: The Case for a Limited Patent Compulsory Licensing Regime},
author={Tullis, T.K.},
journal={UCLA L. Rev.},
volume={53},
pages={279},
year={2005},
publisher={HeinOnline},
filename={Tullis (2005) - Application Of The Government License Defense To Federally Funded Nanotechnology Research.pdf}
}
Law: Policy Discussion: Solve thicket in nanotech using the Gov. License Defence.
GOVERNMENT LICENSE DEFENSE
IN FEDERALLY FUNDED NANOTECHNOLOGY RESEARCH
Unfortunately, the rush to secure worldwide intellectual property
rights in nanotechnology could lead to the development of a "patent
thicket." This term, coined by intellectual property scholars, refers to an
overlapping set of patent rights that requires researchers, inventors, and
entrepreneurs seeking to commercialize new technologies to obtain licenses
from multiple patentees. 5 The development of such a patent thicket could
deter further innovation, 6 and the active enforcement by nanotechnology
patent holders of their exclusivity rights ultimately could result in the creation
of a nanotechnology anticommons-a situation in which a scarce
resource becomes prone to underuse because there are too many owners
holding the right to exclude others from that resource, and no one has an
effective privilege of use.'
@article{van2006clearing,
title={A clearing house for diagnostic testing: the solution to ensure access to and use of patented genetic inventions?},
author={Van Zimmeren, E. and Verbeure, B. and Matthijs, G. and Van Overwalle, G.},
journal={Bulletin of the World Health Organization},
volume={84},
number={5},
pages={352--359},
year={2006},
publisher={SciELO Public Health},
filename={VanZimmeren (2006) - A Clearing House For Diagnostic Testing.pdf}
}
WHO Bulletin: 8 pages. Advocates clearing houses
Abstract In genetic diagnostics, the emergence of a so-called “patent thicket” is imminent. Such an overlapping set of patent
rights may have restrictive effects on further research and development of diagnostic tests, and the provision of clinical diagnostic
services. Currently, two models that may facilitate access to and use of patented genetic inventions are attracting much debate in
various national and international fora: patent pools and clearing houses. In this article, we explore the concept of clearing houses.
@article{verbeure2006patent,
title={Patent pools and diagnostic testing},
author={Verbeure, B. and van Zimmeren, E. and Matthijs, G. and Van Overwalle, G.},
journal={TRENDS in Biotechnology},
volume={24},
number={3},
pages={115--120},
year={2006},
publisher={Elsevier},
filename={Verbeure (2006) - Patent Pools And Diagnostic Testing.pdf}
}
Biology: 6pgs. Advocates Pools for diagnostic testing
There is increasing concern that overlapping patents inthe field of genetics will create a costly and legallycomplex situation known as a patent thicket, which,along with the associated issues of accumulatingroyalty payments, can act as a disincentive forinnovation.
@article{wagner2003information, jstor_articletype = {research-article}, title = {Information Wants to Be Free: Intellectual Property and the Mythologies of Control}, author = {Wagner, R. Polk}, journal = {Columbia Law Review}, jstor_issuetitle = {}, volume = {103}, number = {4}, jstor_formatteddate = {May, 2003}, pages = {pp. 995-1034}, url = {http://www.jstor.org/stable/1123783}, ISSN = {00101958}, abstract = {This Essay challenges a central tenet of the recent criticism of intellectual property rights: the suggestion that the control conferred by such rights is detrimental to the continued flourishing of a public domain of ideas and information. In this Essay, Professor Wagner argues that such theories understate the significance of the intangible nature of information, and thus overlook the contribution that even perfectly controlled intellectual creations make to the public domain. In addition, this Essay shows that perfect control of propertized information--an animating assumption in much of the contemporary criticism--is both counterfactual and likely to remain so. These findings suggest that increasing the appropriability of information goods is likely to increase, rather than diminish, the quantity of "open" information. Further, the benefits of control in fostering coordination and enabling flexibility in arrangements are essential elements of promoting progress in a changing world.}, language = {English}, year = {2003}, publisher = {Columbia Law Review Association, Inc.}, copyright = {Copyright © 2003 Columbia Law Review Association, Inc.}, filename={Wagner (2003) - Information Wants To Be Free.pdf} } Law: Theory/Discussion: Don't worry about the 'control' aspect, information will be free anyway Contemporary criticism of intellectual property rights is notable forits clear focus on the control inherent in the system of government-extendedgrants of exclusivity-in particular the assertion that such controlis in tension with the development of a public domain of information.2This development is (and has been) both intellectually and rhetoricallysignificant. Intellectually, by emphasizing the effects of control, thesecritics can support intellectual property generally, yet condemn it specifically,where the pernicious side effects of the mechanism are seen. In away, this approach seems to have largely transcended the more abstractquestion of whether intellectual property is a socially useful tool, and focusedour attention on the specifics.3 Rhetorically, an entire vocabularyhas been built to support this line of argument. Control-talk is of "thesecond enclosure movement,"4 the lurking "tragedy of the anticom-mons,"5 or the dangers of "patent thickets"6 -not to mention the phenomenonof litigation efforts (or perhaps social movements?) sportingtheir own slogans (and logos), such as "Free the Mouse," "Create Like It's1790," or "When Copyright Attacks."7 This Essay challenges a major tenet of this control-criticism: theclaim that control will reduce the availability of information in the publicdomain.8 The core contention here is that the critics understate-perhapsdramatically-the contribution that even "perfect" control of intellectualcreations makes to the public domain, just as they overstate thecurrent and potential effectiveness of this control. Combining this understandingwith the dynamic incentive-effects of intellectual propertyrights suggests that such rights (even in strong forms) are likely to increasethe content of the public domain rather than decrease it. Thus,while there are perhaps other reasons to limit the scope and enforceabilityof intellectual property rights, concern about the withering of the publicdomain seems not to be one of them. Notwithstandingefforts to the contrary, information cannot truly be controlled, at leastnot in the way that the control-critics suggest. That is, the "fencing" ofinformation is a remarkably futile proposition; the control we offer ownersof intellectual property rights is simply not the control we offer landowners.It should not be, but more importantly, it cannot be. It turns outthat information does "want to be free."' 4 Understanding that this is thegreat strength of intellectual property, as well as the great challenge, offersa new perspective on the function of control and the benefits ofstrong intellectual property rights.'5 @article{wang2010rise, title={Rise of the patent intermediaries}, author={Wang, A.W.}, journal={Berkeley Tech. LJ}, volume={25}, pages={159}, year={2010}, publisher={HeinOnline}, filename={Wang (2010) - Rise Of The Patent Intermediaries.pdf} } Law: Intermediaries as a solution to thickets In this ageof patent thickets,60 an organization must tread carefully lest it infringecountless patents just by doing business,61 and an aggregate license to a largecluster of patents in the appropriate field of technology can provide peaceof mind. Moreover, an aggregate license lowers the search costs for amember company planning to embark on a plan of research anddevelopment in a particular field. Defensive aggregation services strive forcomplete adoption by all players in the market and the resulting obsolescenceof expenditures on patent searches and license negotiations. Though thisscenario may never actually come to pass, companies are likely to have greatinterest in partnering with an entity able to bring them closer to this ideal.
@article{ziedonis2004don,
→The Master File
==The Master File==
@article{allison2003business,
@inproceedings{arundel2003strategic,
cumulative inventors.5 If the share that the cumulative inventor ex- pects to receive does not cover her ex ante development costs, then the cumulative invention will not be developed in the first place. This result is clearly detrimental not only to the cumulative inven- tor, but also to the original inventor
@article{baron2010strategic,
building a patent “thicket.”
company’s patent portfolio. Such a strategy could also lead to “patent thickets”,
number={3},
pages={373--388},
No real mention of thickets but builds off complementary patents
@article{calderini2006standardisation,
inquiry [5].
title={Licensing and Cross-Licensing in Semiconductors and Electronics},
author={Grindley, P.C. and Teece, D.J.},
positive shift in valuation for entrants as we enter the pro-patent era.
title={A Study of Patent Thickets},
author={Hall, B.H. and Helmers, C. and von Graevenitz, G. and Rosazza-Bondibene, C.},
of patents.
jstor_articletype = {research-article},
title = {The Tragedy of the Anticommons: Property in the Transition from Marx to Markets},
products and procedures in the United States. A tragedy of the anticommons may be
the unintended consequence of privatizing basic biomedical research.
@article{heller1998can,
and pays for these discoveries.
@article{kim2004vertical,
agreements, as well as the rise of hold-up litigation.
@techreport{lampe2009patent,
title={Do patent pools encourage innovation? Evidence from the 19th-century sewing machine industry},
progress of research.
@article{lemley2007ten,
Thicket in footnote only
@article{lerner2003structure,
royalties on its own patents (Ricadela, 2006).
title={When means become ends: considering the impact of patent strategy on innovation},
author={Macdonald, S.},
Econ: Theory: Model of seller holdout
@article{merges1996contracting,
away.
managerial implications regarding the valuation of patent portfolios and the design of corporate IP strategies.
title = {Peanut Butter Patents versus the New Economy: Does the Increased Rate of Patenting Signal More Invention or Just Lower Standards?},
Author = {Sanyal, Paroma And Jaffe, Adam B. And Sanyal, Panoma},
useful drugs to market.
@article{shand2007trends,
REVIEW IT CAREFULLY (AGAIN)
author={Siebert, R. and Von Graevenitz, G.},
year={2006},
based on transitivity concepts.
@article{turner2011patent,
@article{von2011measure,
technological opportunities which the fragmentation index does not.
title={Don't fence me in: Fragmented markets for technology and the patent acquisition strategies of firms},
author={Ziedonis, R.H.},
