Strategic Inputs into Patent Pools

Abstract

This article explores what factors determine the decision of a patent pool to accept new inputs. We propose a dynamic analysis of 1337 U.S. patent inputs into 7 important pools. This analysis highlights a trade-off between firm and patent characteristics as the determinants of inclusion of patents into pools. For instance we prove that firms already member of the pool or holding large patent portfolios are able to include lower quality patents. These findings can be explained both by bargaining power and information asymmetry. In particular, as measured by a new indicator, insiders and firms practicing the technology file patents that are better aligned with the criteria of essentiality.