Dr. Stefan Sorg

Articles in Refereed Journals

Gaessler, Fabian; Harhoff, Dietmar; Sorg, Stefan; Graevenitz, Georg von (2024). Patents, Freedom to Operate, and Follow-on Innovation: Evidence from Post-Grant Opposition, Management Science 2024, forthcoming.

• We study the blocking effect of patents on follow-on innovation by others. We posit that follow-on innovation requires freedom to operate (FTO), which firms typically obtain through a license from the patentee holding the original innovation. Where licensing fails, follow-on innovation is blocked unless
  firms gain FTO through patent invalidation. Using large-scale data from post-grant oppositions at the European Patent Office, we find that patent invalidation increases follow-on innovation, measured in citations, by 16% on average. This effect exhibits a U-shape in the value of the original innovation.
  For patents on low-value original innovations, invalidation predominantly increases low-value follow-on innovation outside the patentee’s product market. Here, transaction costs likely exceed the joint surplus of licensing, causing licensing failure. In contrast, for patents on high-value original innovations,
  invalidation mainly increases high-value follow-on innovation in the patentee’s product market. We attribute this latter result to rent dissipation, which renders patentees unwilling to license out valuable technologies to (potential) competitors.
• Also published as: CRC TRR 190 Rationality and Competition Discussion Paper, No. 494

Nagler, Markus; Sorg, Stefan (2020). The Disciplinary Effect of Post-Grant Review – Causal Evidence from European Patent Opposition, Research Policy, 49 (3), 103915. DOI

• We study the causal impact of invalidating marginally valid patents during post-grant opposition at the European Patent Office on affected inventors’ subsequent patenting. We exploit exogenous variation in invalidation by leveraging the participation of a patent’s original examiner in the opposition division as an instrument. We find a disciplinary effect of invalidation: Affected inventors file significantly fewer patent applications in the decade after the decision. The effect is entirely driven by a reduction in low-quality filings, i.e., filings that examiners associate with prior art that threatens the application’s novelty or inventive step. We do not observe shifts into national patenting.

Gaessler, Fabian; Harhoff, Dietmar; Sorg, Stefan (2017). Patents and Cumulative Innovation – Evidence from Post-Grant Patent Oppositions, Academy of Management Proceedings, 2017 (1). DOI

• Using large-scale data on opposition to patents at the European Patent Office (EPO), we investigate the causal effect of a patent’s invalidation on follow-on inventions. We introduce a new instrumental variable exploiting the participation or absence of the patent examiner in the opposition proceeding. According to our baseline model, patent invalidation leads to a highly significant and sizable increase of forward citations. While this is in line with previous studies, disentangling the effect leads us to results that stand in stark contrast to some of the literature. We find that the effects are most pronounced for patents in discrete technology areas, for areas where patent thickets are absent and for patents which are not protected by ""patent fences"". Moreover, the effect is particularly strong for relatively small patent holders facing comparatively small follow-on innovators.

Sorg, Stefan; Vidmar, L.; Pollet, L.; Heidrich-Meisner, F. (2014). Relaxation and thermalization in the one-dimensional Bose-Hubbard model: A case study for the interaction quantum quench from the atomic limit, Physical Review A, 2014 (90). DOI

• Motivated by recent experiments, we study the relaxation dynamics and thermalization in the one-dimensional Bose-Hubbard model induced by a global interaction quench. Specifically, we start from an initial state that has exactly one boson per site and is the ground state of a system with infinitely strong repulsive interactions at unit filling. Using exact diagonalization and the density-matrix renormalization-group method, we compute the time dependence of such observables as the multiple occupancy and the momentum distribution function. Typically, the relaxation to stationary values occurs over just a few tunneling times. The stationary values are identical to the so-called diagonal ensemble on the system sizes accessible to our numerical methods and we further observe that the microcanonical ensemble describes the time averages of many observables reasonably well for small and intermediate interaction strength. The expectation values of observables in the canonical ensemble agree quantitatively with the time averages obtained from the quench at small interaction strengths, and qualitatively provide a good description even in parameter regimes where the microcanonical ensemble is not applicable due to finite-size effects. We discuss our numerical results in the framework of the eigenstate thermalization hypothesis. Moreover, we also observe that the diagonal and the canonical ensembles are practically identical for our initial conditions already on the level of their respective energy distributions for small interaction strengths. Finally, we discuss implications of our results for the interpretation of a recent sudden expansion experiment [Phys. Rev. Lett. 110, 205301 (2013)], in which the same interaction quench was realized.

Discussion Papers

Gaessler, Fabian; Harhoff, Dietmar; Sorg, Stefan; Graevenitz, Georg von (2024). Patents, Freedom to Operate, and Follow-on Innovation: Evidence from Post-Grant Opposition, CRC TRR 190 Rationality and Competition Discussion Paper, No. 494.

• We study the blocking effect of patents on follow-on innovation by others. We posit that follow-on innovation requires freedom to operate (FTO), which firms typically obtain through a license from the patentee holding the original innovation. Where licensing fails, follow-on innovation is blocked unless
  firms gain FTO through patent invalidation. Using large-scale data from post-grant oppositions at the European Patent Office, we find that patent invalidation increases follow-on innovation, measured in citations, by 16% on average. This effect exhibits a U-shape in the value of the original innovation.
  For patents on low-value original innovations, invalidation predominantly increases low-value follow-on innovation outside the patentee’s product market. Here, transaction costs likely exceed the joint surplus of licensing, causing licensing failure. In contrast, for patents on high-value original innovations,
  invalidation mainly increases high-value follow-on innovation in the patentee’s product market. We attribute this latter result to rent dissipation, which renders patentees unwilling to license out valuable technologies to (potential) competitors.
• https://rationality-and-competition.de/wp-content/uploads/discussion_paper/494.pdf
• Forthcoming in: Management Science

Gaessler, Fabian; Harhoff, Dietmar; Sorg, Stefan (2019). Bargaining Failure and Freedom to Operate: Re-Evaluating the Effect of Patents on Cumulative Innovation, Max Planck Institute for Innovation & Competition Research Paper, No. 19-11. DOI

• Also published as: CEPR Discussion Paper 13969

Gaessler, Fabian; Harhoff, Dietmar; Sorg, Stefan (2019). Bargaining Failure and Freedom to Operate: Re-evaluating the Effect of Patents on Cumulative Innovation, CEPR Discussion Paper, 13969.

• We investigate the causal effect of patent rights on cumulative innovation, using large-scale data that approximate the patent universe in its technological and economic variety. We introduce a novel instrumental variable for patent invalidation that exploits personnel scarcity in post-grant opposition at the European Patent Ofï¬ ce. We ï¬ nd that patent invalidation leads to a highly signiï¬ cant and sizeable increase of follow-on inventions. The effect is driven by cases where the removal of the individual exclusion right creates substantial freedom to operate for third parties. Importantly, our results suggest that bargaining failure between original and follow-on innovators is not limited to environments commonly associated with high transaction costs.
• https://ideas.repec.org/p/cpr/ceprdp/13969.html
• Also published as: Max Planck Institute for Innovation & Competition Research Paper No. 19-11