Max-Planck-Institut für Innovation und Wettbewerb, München, Raum 313
The recent upsurge of patent litigation cases initiated by patent assertion entities (PAEs) in the US has led to an intense debate about their effect on innovation dynamics and on the IP system functioning. We contribute to this debate by providing original evidence based on the patenting activity of PAEs in Europe, a region where the patent assertion landscape is growing rapidly and the imminent introduction of the Unified Patent Court and the Unitary Patent will upset the current schemes. Relying on European Patent Office data on patent transfers and patent citations in the high-tech sector, our results show that PAEs acquire patents with high average technological quality. They may thus increase liquidity in the patent market, enhancing efficiency in the capital market for inventions. However, after a transfer occurs, patents transferred to PAEs receive significantly fewer citations than never transferred patents. Interestingly, when we focus directly on transferred patents, we find that there is not significant difference in the after-transfer pattern of citations between patents transferred to PAEs and patents transferred to other entities. On the one hand, the overall evidence suggests that PAEs do not operate as patent intermediaries. On the other, however, also transfers to producing companies seem not to increase the efficiency of the market for technology, opening relevant questions about its entire functioning. These results are robust to different measures of citations considered and to different econometric techniques applied. (joint with Gianluca Orsatti)