Essays on Intellectual Property Rights

Abstract

This dissertation examines imperfections in how intellectual property rights are granted to inventions, as well as how a new organizational form, the Patent Assertion Entity, influences patenting and inventive activity. Although patents have been extensively studied for the economic activity they stimulate and have been used as measures of inventive activity and knowledge flow, little research exists on how patents are granted by the patent office. First, I look at patent lawyers’ incentives and capabilities as they negotiate with the patent office to obtain patents for their clients. I find that patent lawyers obtain broad patents by concealing prior art on behalf of clients for whom they file the most patents. This effect is stronger when they work as associates in the law firm that employs them, or when they have prior experience as examiners at the patent office. I also find that patent lawyers protect their reputation by obtaining a broad patent for their client when they service a large number of clients in the focal patent’s technology area. Further, these effects are stronger when they are partners at law firms, or when they have prior experience as patent examiners. Second, I look at how examiners are biased when dealing with lawyers of a different gender and ethnicity than themselves. I unpack how stereotypes and occupational status create a multi-dimensional status ranking between the lawyer and examiner. Consistency between these rankings can motivate examiners to discriminate against or favor certain demographic lawyer groups, and also shape lawyer behavior towards examiners. Specifically, I find that White male examiners favor Asian male lawyers, while Asian male examiners discriminate against White male lawyers while allowing intellectual property claims. Contrary to expectations, I also find that Asian men favor white women by granting them more intellectual property. In my final paper, I study a new organizational form, the Patent Assertion Entity (PAE), that have emerged arguably as a consequence of these imperfections in the patenting process. PAE firms like Intellectual Ventures do not create inventions or products, but buy patents from inventors, bundle them into patent portfolios, and license these bundles to product manufacturers. Scholars have extensively debated their impact; some have argued that they incentivize the creation of incremental patents and inventions, while others contend that they create a market for the sale and purchase of incremental patents. I study their impact empirically on small firms that have fewer commercialization assets and likely to rely more on licensing revenues, vis-à-vis large firms that are more likely to create products. I find that they incentivize the creation of more, relatively incremental patents and inventions by small firms lacking commercialization assets. On the other hand, by providing a one-stop shop for such patents, they allow large firms to focus their efforts in the creation of fewer patents that are more novel.