Three essays on the growth of the market for patents and its challenges to innovation policy

Abstract

A sheer number of US patents have been transferred through market transactions and that the size of the market for patents has grown. In this dissertation, I conduct three complementary studies to examine how the market for patents shapes technological innovation. Drawing on the broad discussion of the benefits and costs of patent ownership transfer for invention, I develop three research questions, and in three essays I address each of them through building theoretical models and conducting empirical analysis. In the first study, I examine a firm's economic incentive for purchasing patents to gain strategic benefit over market rivals and how the firm's patents purchase results in the market rival's innovative activities. In the second study, I investigate the antitrust issue of patent consolidation caused by the purchase of multiple patents by a small number of firms and the impact of a governmental authorities' regulation of the generated patent monopolies by patent consolidation on the development of follow-on innovations. In the last study, I analyze the impact of granting a firm the exclusive access to a university's inventions through patents transfer on the follow-on innovative activities. Altogether, this dissertation contributes to advancing our understanding of the distinctive nature of the market for patents from the market for technology, and it extends the conventional discussion of how the patents system may affect innovation.