Author(s)
Source
Rand Journal of Economics, Vol. 32:1, pp. 101-128, 2001
Summary
This study investigates how the 1980s “pro-patent” policy shift affected semiconductor firms' patenting activities.
Policy Relevance
The article provides new quantitative and qualitative evidence about a landmark patent policy shift in the 1980s and its effects on the behavior of firms in one innovation-incentivized industry.
Main Points
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We examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation.
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Survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to R&D. Yet the propensity of semiconductor firms to patent rose dramatically in the mid-1980s.
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We explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 U.S. semiconductor firms during 1979-95.
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The results suggest that the 1980s strengthening of U.S. patent rights spawned "patent portfolio races" among capital-intensive firms, but also facilitated entry by specialized design firms.