The Patent Paradox Revisited: An Empirical Study of Patenting in the U.S. Semiconductor Industry, 1979-95

Intellectual Property and Patents

Article Snapshot

Author(s)

Bronwyn Hall and Rosemarie Ziedonis

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

  • We examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation.
     
  • 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.
     
  • 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.
     
  • 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.

 

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