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Innovation Effect on Patent Pool. Yu–Hui Wang Assistant Professor of National Taipei University of Technology. Taipei, Taiwan. Outline. Patent Pool Do patent pools encourage innovation domain? Methodology Initial result. Patent Pool.
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Innovation Effect on Patent Pool Yu–Hui Wang Assistant Professor of National Taipei University of Technology. Taipei, Taiwan
Outline • Patent Pool • Do patent pools encourage innovation domain? • Methodology • Initial result
Patent Pool • The large number of issued patents makes it virtually impossible to identify all the potentially relevant patents, review their claims and evaluate the infringement risk or the need for a license
Patent Pool Source: Techdirt
Patent Pool • Patent pools which involve patents from multiple patentees for the purpose of pooling a group of patents into a single licensing package is a readily available tool used for overcoming the potentially harmful effects of overlapping or blocking patent rights.
Patent Pool Source: Isamu Yoshimatsu, Standards and Patent Pools
Patent Pool • The patent pool has two main advantages. • 1) Achieves efficient negotiation for patent licenses • 2) Avoids an accumulation of patent fees • Continuation and Divisional Applications for patent pool is another issue.
Do patent pools encourage innovation domain? • Theoretical models of patent pools suggest that pools encourage innovation for the reason that lower risks of litigation and improved licensing schemes increase expected profits for participating firms, and thus it increases firms’ incentives to invest in R&D. • Hall, Ziedonis (2001) and Joshi, Nerkar(2011) suggested that modern pools would boost firms’ innovative performance.
Do patent pools encourage innovation domain? • However, • Farrell and Katz (2000) stated the innovation incentives of all of the firms in the industry change substantially subsequent to the pool formation. • Lampe and Moser (2010) find a significant decline in the innovation rate of both groups in the sewing machine industry after the formation of the Sewing Machine Combination.
Do patent pools encourage innovation domain? • Similarly, studying three modern pools in the optical disk industry, Joshi and Nerkar (2011) find once a patent pool is formed; the pool licensors generate less and lower quality patents in the technology field relating to the patent pool relative to those of nonparticipants.
Do patent pools encourage innovation domain? • Theoretical suggestions are inconsistent with empirical findings about whether patent pools encourage innovation domain. • This study empirically examines the pool-level innovation on patent pool formation.
Methodology Source: Ruud Peters, 2011
Methodology Multiple Optical Dic Related Patent Pools Source: Harper (2012)
Methodology Members and patent counts granted in U.S. of DVD 3C
Methodology • Hypothesis: Patent pool formation leads to lower quality licensor patents being incorporated into the patent pool. • Patent Quality is measured by four indicators that previous scholars have linked to the notion of patent quality in this study.
Methodology • Hotelling’s T2 is the case of the chi-square multivariate statistic in which the means, variances and covariances are unknown and must be estimated. • Its form is: • T2t = n(Xbar t – estµ )’S-1(Xbar t – estµ), where • t: sample (e.g., time period or batch) • T2t: Hotelling T2 at t • n: number of observations for each t • Xbar t: vector of estimated means for all n at t, across all variables • estµ: vector of estimated means of means for all n for all t, for each variable • (Xbar t – estµ)’: transpose of vector of differences for each variable • S-1: inverse of estimated symmetrical variance-covariance matrix
