The co-construction of court-made patent policy and firm strategy

Abstract

The need to accommodate new technologies at an increasingly fast pace has led the judicial branch to become a key source of changes in patent policy in the United States. This dissertation examines the co-construction of patent policy and innovation strategy in the judicial branch of government. Its main contributions are to the economics of innovation literature and to the policy process literature. A long-lasting debate on the relation between patent and innovation has led to a multitude of studies supporting each side of the debate about the desirability of strong patents, as well as a lack of conclusive empirical evidence, mainly due to methodological challenges in estimating the impact of a change in patent strength. Leveraging a shock created by the US Supreme Court, I show that the common belief that weaker patents lead to fewer innovations is wrong (for a specific aspect of patent), while accounting for the heterogeneous patent-related strategies. Using mixed-methodology (interviews, court documents and census data), I find that the arguments made in court mirror the debate in the academic literature and I show that impact on innovation is contingent on firms’ characteristics and innovation strategies. Motivated by the heterogeneous impact of patent policy, stakeholders attempt to influence the US Supreme Court decisions. Therefore, taking advantage of this setting, I address a gap in the policy process literature, which has neglected the judicial branch of government. This dissertation builds on perspectives from the legal and political science literatures, examining policymaking processes in the US Supreme Court to incorporate the judicial branch of government in the corpus of policy process literature. Focusing on the role of stakeholders and how they use information strategically, I find evidence of influence of different types of information at the two phases of the policy process, a distinction unobserved in settings considered in the existing policy process literature.