We study how the market for innovation affects enforcement of patent rights. Conventional wisdom associates the gains from trade with comparative advantage in manufacturing or marketing. We show that these gains imply that patent transactions should increase litigation risk. We identify a new...

Cumulative innovation is central to economic growth. Do patent rights facilitate or impede such follow-on innovation? This paper studies the effect of removing patent protection through court invalidation on the subsequent research related to the focal patent, as measured by later citations. We...

We study how fragmentation of patent rights ('patent thickets') and the formation of the Court of Appeal for the Federal Circuit (CAFC) affected the duration of patent disputes, and thus the speed of technology diffusion through licensing. We develop a model of patent litigation which predicts...

We study the interplay between transportation infrastructure, knowledge flows, and innovation. Exploiting historical data on planned portions of the interstate highway system, railroads, and exploration routes as sources of exogenous variation, we estimate the effect of U.S. interstate highways...

Patents are a useful but imperfect reward for innovation. In sectors like pharmaceuticals, where monopoly distortions seem particularly severe, there is growing international political pressure to identify alternatives to patents that could lower prices. Innovation prizes and other non-patent...

Large firms spawn spin-outs caused by innovations deemed unrelated to the firm's overall business. Small firms generate demand for specialized services that lower entry costs for others. We study the interplay of these two localized externalities and their impact on regional innovation. We...

This paper shows that the process of enforcing patent rights both dilutes and distorts Research and Development (R&D) incentives. We examine the characteristics of litigated patents by combining, for the first time, information about patent case filings from the US district courts with detailed...

We investigate how liability rules and property rules affect the incentives to invest in research tools. We argue that it is hard to deter infringement under any of the enforcement regimes available. However, counterintuitively, a credible threat of infringement can actually be beneficial to the...

In a model with moral hazard and assymmetric information, we show that it can be welfare-improving to differentiate patent lives when firms have different R&D productivities. A uniform patent life provides excessive R&D incentive to low-productivity firms, and too little to high ones. The...

This paper develops a framework for evaluating the social returns to infrastructure investments that intensify product market competition. We use a circular model with asymmetric production costs both for incumbent firms and potential entrants, where unit transport cost measures the intensity of...