Patents and Cumulative Innovation: Causal Evidence from the Courts
Mark Schankerman (London School of Economics, United Kingdom)

Cumulative innovation is central to economic growth. Do patent rights facilitate or impede follow-on innovation? We study the causal effect of removing patent rights by court invalidation on subsequent research related to the focal patent, as measured by later citations. We exploit random allocation of judges at the U.S. Court of Appeals for the Federal Circuit to control for endogeneity of patent invalidation. Patent invalidation leads to a 50 percent increase in citations to the focal patent, on average, but the impact is heterogeneous and depends on characteristics of the bargaining environment. Patent rights block downstream innovation in computers, electronics and medical instruments, but not in drugs, chemicals or mechanical technologies. Moreover, the effect is entirely driven by invalidation of patents owned by large patentees that triggers more follow-on innovation by small firms. Joint with Alberto Galasso.

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R&D Spillovers: Competition versus Cooperation
Jo Seldeslachts (University of Amsterdam)

We build on Bloom et al.’s (2013) general framework of capturing two countervailing “spillovers”: A positive effect from technology (knowledge) spillovers and a negative business stealing effects from product market rivals. In particular, we add research co-operation as a mediating factor in generating these spillovers. Our predictions are tested using information on research collaborations from the U.S. National Cooperation Research Act. Joint with Albert Banal-Estañol, Tomaso Duso en Florian Sczucs.