09 Apr WORKING PAPER

Orsatti, Gianluca, and Sterzi, Valerio – Do Patent Assertion Entities Harm Innovation? Evidence from Patent Transfers in Europe – Cahiers du GREThA 2018-6

>>> ABSTRACT
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 on high-tech patent transfers involving PAEs at the European Patent Office from 1997 to 2012. Our evidence is threefold. First, relative to both patents transferred to producing companies (PEs) and never-transferred patents, patents purchased by PAEs are on average of higher technological quality. PAEs may thus increase liquidity in the patent market, enhancing its efficiency. Second, around the transfer and in the post transfer period, the citation profile of patents transferred to PAEs falls considerably, suggesting that PAEs do not play as intermediaries in the market. Interestingly, also patents transferred to PEs do receive fewer citations after the transfer, suggesting an increasing incidence of strategic patent acquisitions in the ICT domain and opening relevant questions about its entire functioning. Finally, a finer comparison of citation profiles between patents transferred to PAEs and patents transferred to PEs shows a non-significant difference in the post-transfer citation drop: also PEs, when involved in transfers of specific technologies, seem not to purchase patents for inventing around the protected technologies.

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