nbianchi at stanford dot edu
Joint with Joerg Baten and Petra Moser
Compulsory licensing – which allows patents to be licensed without the consent of patent owners – is a prominent mechanism to improve access to innovations, such as medicines to combat HIV, in the developing world.
Critics have argued that compulsory licensing discourages innovation by weakening the intellectual property of foreign inventors.
This paper exploits the 1918 US Trading-with-the-Enemy Act (TWEA) as an empirical setting to investigate the effects of compulsory licensing on patenting in Germany, as the country whose intellectual property was violated under the TWEA.
The analysis examines new archival data on 79,591 patents for chemicals in Germany between 1900 and 1930. Difference-in-differences regressions compare changes in patenting by German inventors after 1918 for fields in which German-owned patents were violated with changes in patenting for other fields.
This analysis indicates a 38 percent increase in invention for fields in which German-owned patents were licensing. Intent-to-treat regressions, which use patents that were available for licensing as a measure for exposure to licensing, indicate a 30 percent increase in patenting.
Firm-level regressions show that the observed increase in patenting was driven by firms whose patents had been licensed. Analyses with renewal data as a control for high-quality patents confirm a substantial increase in innovation for research fields with licensing.
“The direct and indirect effects of educational expansion”
“STEM education and invention”