Do Patent Pools Encourage Innovation? Evidence from the 19th-Century Sewing Machine Industry / Ryan L. Lampe, Petra Moser.

Format:

Book

Author/Creator:

Lampe, Ryan L.

Contributor:

National Bureau of Economic Research.

Moser, Petra.

Series:

Working Paper Series (National Bureau of Economic Research) no. w15061.

NBER working paper series no. w15061

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2009.

Summary:

Members of a patent pool agree to use a set of patents as if they were jointly owned by all members and license them as a package to other firms. Regulators favor pools as a means to encourage innovation: Pools are expected to reduce litigation risks for their members and lower license fees and transactions costs for other firms. This paper uses the example of the first patent pool in U.S. history, the Sewing Machine Combination (1856-1877) to perform the first empirical test of the effects of a patent pool on innovation. Contrary to theoretical predictions, the sewing machine pool appears to have discouraged patenting and innovation, in particular for the members of the pool. Data on stitches per minute, as an objectively quantifiable measure of innovation, confirm these findings. Innovation for both members and outside firms slowed as soon as the pool had been established and resumed only after it had dissolved.

Notes:

Print version record

June 2009.