Antitrust, Patents, and Cumulative Innovation: Evidence from Bell Labs

Markus Nagler, Martin Watzinger, Thomas Fackler and Monika Schnitzer ()

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: How large is the impact of intellectual property on cumulative innovation in electronics, computers and communications? Following an antitrust lawsuit against Western Electric and AT&T, Bell Labs had to license all patents published by 1956 for free. We find that this removal of patent rights increased subsequent citations to Bell's patents by 7%. Patenting in affected patent subclasses increased by 17%. The effect comes from young and small firms in fields in which Bell did not remain commercially active. Placebo regressions support the identification assumption of parallel trends in citations.

JEL-codes: L43 O31 O33 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-com, nep-ino, nep-ipr, nep-law, nep-sbm and nep-tid
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