Short answer

When developing new products or technologies, be aware that the patent landscape, particularly the presence of patent assertion entities, can influence the accessibility and utilization of existing knowledge.

Field: Innovation & Design
Source: Digital Access to Scholarship at Harvard (DASH) (Harvard University) (2015)
Method: Econometric analysis using patent data and exogenous variation.
Evidence: Strong effect

Acquisition of patents by patent assertion entities (PAEs) significantly reduces subsequent citations, suggesting a strategic suppression of innovation by large firms to avoid assertion. This innovation & design research insight is drawn from a 2015 study published in Digital Access to Scholarship at Harvard (DASH) (Harvard University). Using Econometric analysis using patent data and exogenous variation., researchers explored how this design variable affects real-world outcomes. The key design takeaway: When developing new products or technologies, be aware that the patent landscape, particularly the presence of patent assertion entities, can influence the accessibility and utilization of existing knowledge.

Study

Innovation & DesignHigh ImpactStrong effect

Patent Assertion Entities Reduce Follow-On Innovation by 40%

Acquisition of patents by patent assertion entities (PAEs) significantly reduces subsequent citations, suggesting a strategic suppression of innovation by large firms to avoid assertion.

Digital Access to Scholarship at Harvard (DASH) (Harvard University) · 2015

Key Findings

01Patents acquired by PAEs experience a significant reduction in follow-on citations.
02This reduction is primarily driven by the citing behavior of large entities.
03The effect disappears after the acquired patents expire.

Application

Design takeaway

How to apply

When conducting prior art searches or assessing the innovation potential of a technology, investigate the ownership history of key patents for any acquisition by PAEs and consider the potential for reduced follow-on development.

Project actions

01When researching existing technologies, look into who owns the patents and if they are held by patent assertion entities.
02Consider how patent ownership might influence the future development of a technology in your design project.

Method & Evidence

AimWhat is the impact of patent assertion entities (PAEs) acquiring patents on the subsequent innovation activity related to those patents?

MethodEconometric analysis using patent data and exogenous variation.

ProcedureThe study identified patent acquisitions by PAEs using the 'deaths' of individual patent owners as an exogenous shock. The impact on follow-on citations was then estimated, controlling for expert-added citations. The analysis also examined whether this effect changed after patent expiry and differentiated the impact based on the citing entity's size.

ContextIntellectual property management and innovation ecosystems.

Variables

IVAcquisition of patents by Patent Assertion Entities (PAEs).

DVNumber of follow-on citations to acquired patents.

CVPatent examiner-added citations, patent expiry status, size of citing entity.

Strengths & Limitations

Strengths

+Uses an exogenous shock (death of patent owner) to identify causal impact.
+Differentiates impact based on citing entity size and patent expiry.

Limitations

It's hard to definitively prove intent; citation patterns are just one indicator of innovation.

Reliability & validity

The use of exogenous variation strengthens the internal validity. The reliance on citation counts as a proxy for innovation is a potential limitation for external validity.

Think critically

To what extent does the 'death' of a patent owner truly provide exogenous variation, and could other factors correlated with patent ownership changes also influence citation patterns?

Design Principles

"Innovation ecosystems are sensitive to the strategic behavior of key players, including patent holders and intermediaries."

Understanding how patent ownership influences the flow of innovation is crucial for designing effective intellectual property strategies. This insight highlights a potential unintended consequence of patent aggregation by third parties, impacting the broader innovation ecosystem.

What This Means for Your Design

Buying patents can sometimes stop other people from building on that idea, especially if a company that just buys patents to sue others is involved.

How to use in your project

1.Reference this study when discussing the external factors that might influence the innovation or development of your design concept, particularly concerning intellectual property.

Add to My Project

Quick Cite

Paragraph starter

Research indicates that the acquisition of patents by patent assertion entities (PAEs) can lead to a significant decrease in subsequent innovation, as evidenced by reduced follow-on citations. This effect is particularly pronounced when large firms are the potential innovators, suggesting a strategic avoidance of patents held by PAEs to mitigate the risk of assertion. This highlights the complex interplay between intellectual property rights, market dynamics, and the broader innovation landscape.

Source

Digital Access to Scholarship at Harvard (DASH) (Harvard University)

Essays on Innovation, Strategy and Competition

journal · 2015

View source

Questions About This Research

What does the research say about patent assertion entities reduce follow-on innovation by 40%?: When developing new products or technologies, be aware that the patent landscape, particularly the presence of patent assertion entities, can influence the accessibility and utilization of existing knowledge. Evidence: Digital Access to Scholarship at Harvard (DASH) (Harvard University) (2015).
Why does "Patent Assertion Entities Reduce Follow-On Innovation by 40%" matter for design?: Understanding how patent ownership influences the flow of innovation is crucial for designing effective intellectual property strategies. This insight highlights a potential unintended consequence of patent aggregation by third parties, impacting the broader innovation ecosystem.
How can designers apply this research?: When developing new products or technologies, be aware that the patent landscape, particularly the presence of patent assertion entities, can influence the accessibility and utilization of existing knowledge.
What were the main findings?: Patents acquired by PAEs experience a significant reduction in follow-on citations.. This reduction is primarily driven by the citing behavior of large entities.. The effect disappears after the acquired patents expire.
What research method was used?: Econometric analysis using patent data and exogenous variation..
How strong is the evidence?: Evidence strength is rated Strong effect, based on a 2015 journal from Digital Access to Scholarship at Harvard (DASH) (Harvard University).
What should I do differently in my next project?: When conducting prior art searches or assessing the innovation potential of a technology, investigate the ownership history of key patents for any acquisition by PAEs and consider the potential for reduced follow-on development.
What are the limitations?: The study focuses on citation counts as a proxy for innovation and may not capture all forms of knowledge transfer or development.