Strategic patenting and software innovation

Michael Noel and Mark Schankerman

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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.

Keywords: patents; anti-commons; patent thickets; r&d spillovers; market value (search for similar items in EconPapers)
JEL-codes: L43 L86 O31 O32 O33 O34 O38 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2006-08-01
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:121695

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