IP² Working Paper No. 17001
by Bronwyn H. Hall, Christian Helmers, and Georg von Graevenitz
Original date: January 5, 2017
Keywords: IPR, patents, entry, technological opportunity, technological complexity, hold- up
We analyze the effect of patent thickets on entry into technology areas by firms in the UK. We present a model that describes incentives to enter technology areas characterized by varying technological opportunity, complexity, and the potential for hold-up due to the presence of patent thickets. We show empirically that our measure of patent thickets is associated with a reduction of first time patenting in a given technology area controlling for the level of technological complexity and opportunity. Technological areas characterized by more technological complexity and opportunity, in contrast, see more entry. Our evidence indicates that patent thickets raise entry costs, which leads to less entry into technologies regardless of a firm’s size.
COMPLETE PAPER: Technology Entry in the Presence of Patent Thickets
ABSTRACT: Technology Entry in the Presence of Patent Thickets