Global Collaborative Patents

Intellectual Property, Patents and Innovation and Economic Growth

Article Snapshot

Author(s)

William R. Kerr and Sari Pekkala Kerr

Source

The Economic Journal, Vol. 128, pp. F235-F272, July 2018

Summary

Some firms based in the United States file collaborative patents on inventions made by teams with members inside and outside the United States. This collaborative innovation is growing in importance. Collaborative patents tend to be of high quality.

Policy Relevance

Firms use teams of inventors working across borders to develop high quality innovations at reduced cost.

Main Points

  • The share of research and development (R&D) conducted by foreign operations for firms based in the United States rose from 6 percent in 1982 to 14 percent in 2004.
     
  • “Global collaborative patents” are developed by a team with at least one inventor outside the United States and at least one inventor inside the United States; in 2004, such teams accounted for 6 percent of the worldwide patents of multinational firms based in the United States.
     
  • Analysis of the surnames of inventors shows that inventors of non-Anglo-Saxon origin account for over 40 percent of inventions relating to electronics, computers, and medical needs, but this data does not distinguish between foreign-born inventors and those born in the United States.
     
  • Firms based in the United States often use global collaborative teams to enter regions in which intellectual property protection is weak, usually developing countries.
     
    • U.S.-based firms entering emerging markets often rely on global collaborative teams, with over 70 percent of their patents coming from such teams.
       
    • U.S.-based firms entering European or Japanese markets rely on global teams somewhat less, with only about half the patents filed by global teams.
       
    • By the seventh year after a firm’s first entry into any market, less than 45 percent of the firm’s patents are filed by global collaborative teams.
       
  • When a firm enters a market in a country with few speakers proficient in English, collaborative patents are less likely, unless at least one inventor is willing to move across borders to help resolve language and cultural barriers.
     
  • Global collaborative patents tend to be filed for strong innovations, sometimes stronger than the innovations made by teams exclusively based in the US, and often stronger than those made by teams exclusively based abroad; the strength of an innovation is measured by counting later citations to the patent by teams inside and outside the firm.
     
  • Firms and managers often report being disappointed by the quality of the results when innovation is moved overseas to reduce costs; using global collaborative teams can improve the quality of such research.
     
  • Firms should plan their innovation teams carefully, arranging short-term travel policies and multinational employee transfer visas to facilitate cross-border collaboration.
     

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