Intellectual Property Protection Lost and Competition: An Examination Using Machine Learning
Utku U. Acikalin,
Tolga Caskurlu,
Gerard Hoberg and
Gordon Phillips
No 30671, NBER Working Papers from National Bureau of Economic Research, Inc
Abstract:
We examine the impact of lost intellectual property protection on innovation, competition, acquisitions, lawsuits and employment agreements. We consider firms whose ability to protect intellectual property (IP) using patents is weakened following the Alice Corp. vs. CLS Bank International Supreme Court decision. This decision has impacted patents in multiple areas including business methods, software, and bioinformatics. We use state-of-the-art machine learning techniques to identify firms’ existing patent portfolios’ potential exposure to the Alice decision. While all affected firms decrease patenting post-Alice, we find an unequal impact of decreased patent protection. Large affected firms benefit as their sales and market valuations increase, and their exposure to lawsuits decreases. They also acquire fewer firms post-Alice. Small affected firms lose as they face increased competition, product-market encroachment, and lower profits and valuations. They increase R&D and have their employees sign more nondisclosure agreements.
JEL-codes: D43 G34 O31 O33 O34 (search for similar items in EconPapers)
Date: 2022-11
New Economics Papers: this item is included in nep-bec, nep-big, nep-cmp, nep-com, nep-ino, nep-ipr, nep-lab and nep-sbm
Note: CF PR
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