An Empirical Look at Software Patents

Software patents have grown rapidly in number and now comprise 15% of all patents. They are acquired primarily by large manufacturing firms in industries known for strategic patenting; only 5% belong to software publishers. The very large increase in software patent propensity over time is not adequately explained by changes in R&D investments, employment of computer programmers, or productivity growth. The residual increase in software patent propensity is consistent with a sizeable increase in the cost effectiveness of software patents during the 1990s, perhaps arising from changes in the application of patent law to computer software.     

Firm financing and growth in the Arab region

This paper documents how firms in Arab countries use equity, corporate bond and syndicated loan markets to obtain financing and grow. Working with a new dataset on issuance activity in domestic and international markets and firm performance, the paper finds that capital raising through these markets has grown rapidly since the early 1990s and involved an increasing number of firms. Whereas the amounts raised in equity and loan markets (relative to gross domestic product) stand well relative to international standards, bond issuance activity lags behind. However, bond financing has gained importance over time. Equity issuances take place primarily in domestic markets, whereas bonds and loans are mostly issued internationally, display long maturities and entail low levels of credit risk. Issuing firms from the Arab region are very large compared to international standards. They also tend to be larger, faster growing and more leveraged than non-issuing firms in Arab countries.     

The impact of initial public offerings on innovations: Short-termism or initial governance force exit?

We study the impact of initial public offerings (IPOs) on corporate innovations in China. The findings suggest that going public significantly impedes corporate innovations by lowering overall innovation quality. For firms with shareholders selling or pledging less shares after IPO, the number of patents increases, but the nonself-citations per patent decrease relative to matched non-IPO firms. In contrast, for firms with shareholders selling or pledging more shares after IPOs, both the number of patents and nonself-citations per patent decrease. The magnitudes of impact in the latter are stronger than those of former, supporting the initial governance force exit hypothesis.     

An analysis of the effect of software intellectual property rights on the performance of software firms in South Korea

This paper explores the effect of software intellectual property rights (IPRs) on the performance of software firms in South Korea using the statistics of software copyright registrations and patent applications along with the financial statements of firms. According to our empirical results, R&D and software R&D input has a strong positive effect on the production of software copyrights and patents, and large firms exploit software IPRs better than small firms. We also found that there are quite different trends in the selection of the legal means of protection; firms in the software industry prefer to copyrighting, whereas firms in the manufacturing industry prefer to patenting. In addition, software copyrighting has a positive effect on software revenue and total revenue of firms, but software patenting fails to show a positive effect on software revenue. Consequently, in contrast to the prevailing consensus indicating a high preference for patenting, it is obvious in our analysis that software copyrighting is more beneficial for software firms.     

THE ROLE OF PATENTS IN INFORMATION AND COMMUNICATION TECHNOLOGIES: A SURVEY OF THE LITERATURE

During the last few decades, the number of patents in information and communication technologies has increased considerably. An increasing number of patents and the associated fragmentation of IP rights have generated a series of potentially problematic consequences. Patent thickets, royalty stacking, the emergence of patent assertion entities, increased patent litigation – particularly around standard essential patents – and the difficulties with defining fair, reasonable, and nondiscriminatory licensing terms are some of the most debated issues in the literature that we review in this paper. We devote a specific section of our survey to patent quality, currently one of the most debated issues surrounding the patent system. In our analysis, we mix theoretical and empirical arguments with a more policy‐oriented reasoning. This allows us to better position the different issues in the relevant political and economic context.     

Trade credit financing and stock price crash risk

This study investigates the association between trade credit financing and stock price crash risk within China's context. We find that firms using more trade credit financing have significantly lower future stock price crash risk. This negative association is more pronounced for firms with greater information asymmetry and for firms located in less developed financial markets. This finding is robust to the endogeneity concern, alternative measures of stock price crash risk, and the inclusion of other factors identified in prior studies that might affect stock price crash risk. Further evidence suggests that both the monitoring mechanism and the disclosure mechanism drive the documented relation. Our study suggests that access to trade credit can significantly reduce the likelihood of crash risk in a country like China with less developed formal bank financing. Our study also suggests that investors can effectively avoid stock price crash risk by using the trade credit information disclosed in financial statements.     

Firm Experience and Market Entry by Venture Capital Firms (1962–2004)

In this paper, we examine a firm's decision to enter new markets as related to the depth and breadth of its experience and the relative distance of those markets. We situate our discussion and analysis in the context of the venture capital (VC) industry, and examine whether and when US VC firms enter five high‐technology investment markets through first‐ or later‐round investments. This setting allows us to observe both the firms that chose to enter a new market and those that did not, and analyse the antecedents of these decisions. We find that VC firms overall are less likely to enter distant markets; those with broader experience are more likely to make first‐round entries. In addition, VC firms with deeper investment experience are more likely to make first‐round entries in proximate markets and less likely to enter distant markets and make later‐round entries. These results offer interesting implications for the literature on organizational learning and entrepreneurship.     

Flow Signals: Evidence from Patent and Alliance Portfolios in the US Biopharmaceutical Industry

Integrating signalling theory and the portfolio diversity literature, we theorize that diversity in a firm's patent and alliance portfolios sends contrasting flow signals impacting its market value in a nuanced way. Diversity in an alliance portfolio mediates the patent portfolio diversity – market value relationship by suppressing the negative effect of patent portfolio diversity creating an overall positive effect. We test our mediation model on a longitudinal set of 225 US biopharmaceutical firms that were awarded 17,078 patents and participated in 37,744 alliances between 1990 and 2006. Our theory and findings contribute three novel insights. First, we demonstrate the value of a temporal lens in explaining why diversity in a firm's patent and alliance portfolios send flow signals that establish expectations among market observers and have performance implications. Second, establishing that patent and alliance portfolio diversity are temporally sequenced provides compelling evidence for the value of studying multiple types of portfolios, their temporal relationships and effects on firm outcomes. Third, since diversity in a firm's portfolios can send contrasting flow signals conditioned on the cognitive demands and proximity involved in interpreting the signals, firms that do not maintain a ‘signalling fit’ with market observers increase the probability of unintentional negative signalling effects.     

Contributing to markets for technology? A comparison of patent filing motives of individual inventors,small companies and universities

We compare patenting motives of individual inventors, small firms, and universities to those of large firms. We use data from a survey (641 responses) among applicants at the European Patent Office. Our results from regression and factor analyses confirm significant differences among applicant types. The generation of licensing opportunities is rated as being more important if the applicant is a university, individual inventor or small firm. Blocking and prevention of imitation is rated as being less important if the applicant is a university. We interpret that this finding results from the universities' willingness to license under adequate conditions and their tendency not to use their patents for preventing the diffusion of their technology and its usage by others. Individual inventors and small firms place a higher importance on using patents as signals to investors, suggesting that patents are perceived as useful to secure access to the capital necessary to start or grow a business. Among all applicant groups, individual inventors attribute the most importance to blocking as a patent filing motive. This gives cause for concern because individuals who do not manufacture products on their own but, rather, use their patents to block others from production act as patent trolls.     

Market share and firms’ patent exploitation

As the current patent policy encourages the early stage of innovation but imposes hardly any regulations on how patent holders use their patents, an understanding of how firms use their patents is largely lacking. In this study, we seek to determine whether differences exist in firms’ strategies for utilizing patents depending on their market share. Using a discrete choice model, the repeated multinomial logit model, we analyzed Korean firms’ choices of patent use. Market share is found to positively influence three patent exploitation modes: own use, simultaneous exploitation of own use and licensing, and blocking. And the blocking use of patents is the most significant mode that is positively associated with market share. Our results provide a basis for understanding the effects of patent policy from the industrial perspective, such as industrial organization or competition policy. We discussed the implications for various actors related to patent systems, including researchers, policy-makers, and practitioners.     

Are patent fees effective at weeding out low‐quality patents?

The paper investigates whether patent fees are an effective mechanism to deter the filing of low‐quality patent applications. The study analyzes the effect on patent quality of the Patent Law Amendment Act of 1982, which resulted in a substantial increase in patenting fees at the U.S. Patent and Trademark Office. Results from a series of difference‐in‐differences regressions suggest that the increase in fees led to a weeding out of low‐quality patents. About 10% of patents in the lowest quality decile were filtered out, with the effect concentrated in the patents of firms whose overall patent portfolio was medium to large (more than 20 patents). The study has strong policy implications in the current context of concerns about declines in patent quality.     

The coincidence of patent thickets—A comparative analysis

The growth of patent thickets—technology fields that are characterized by a large overlap of rights between different right holders—poses a challenge for innovators. Patent thickets are argued to create strong friction in innovation due to a pronounced potential for holdup. So far, we do not know whether patent thickets coincide in all patent systems or if differences exist that policy makers and managers must take into account when aiming to disentangle and to navigate patent thickets, respectively. To address this gap, we measure patent density of technology fields in the patent systems of the United States, the German patent system governed by the German Patent and Trademark Office (DPMA), and the European patent system governed by the European Patent Office (EPO). Our comparisons reveal both interesting differences and similarities between the analyzed patent systems. Although the United States and the EPO patent system show similar relative patent density patterns across technology fields, the German patent system strongly differs from the previous two. This implies that such deviations need to be taken into account by policy makers when considering regulatory measures as well as by companies in their intellectual property strategy.     

The impact of private benefits on institutional ownership change: evidence from markets with different sentiments

This study investigates the relationship between private benefits and institutional ownership change in markets characterized by different investors’ sentiments. High-sentiment markets tend to overvalue a firm and thereby offer institutional investors a chance to sell shares and profit from overvaluation by forgoing the private benefits otherwise obtainable. Empirical analysis of ownership data from 1990 to 2008 reveals that, in high-sentiment markets, institutional investors sell more shares low in private benefits (dual-class firm share) than shares high in private benefits (non-dual-class firm share). In contrast, firm insiders, who consume significant private benefits in both dual-class and non-dual class firms, sell more dual-class firm shares in both high- and low-sentiment markets. Their ownership disposition is more likely driven by the need for diversification. Subsample analyses show that public pension funds drive the market-sentiment-related change of institutional ownership.     

The R&D Investment–Uncertainty Relationship: Do Strategic Rivalry and Firm Size Matter?

This paper uses a real options perspective to augment a standard research and development (R&D) investment model and implement a firm‐level empirical analysis to assess the practical significance of market uncertainty and its interactions with strategic rivalry and firm size. We use a measure of firm‐relevant market uncertainty along with panel data and find that firms invest less in current R&D as uncertainty about market returns increases. The effect of firm‐specific uncertainty on R&D investment is smaller in markets where strategic rivalry is likely to be more intense. Furthermore, holding access to financing constant, the effect of uncertainty on R&D investment is attenuated for large firms. Copyright © 2012 John Wiley & Sons, Ltd.     

专利无效宣告的市场反应研究

既有文献忽视了作为行政保护手段的专利无效宣告。通过专利无效宣告事件识别无效宣告方和专利被无效宣告方,采用事件研究法探讨投资者对专利无效宣告的市场反应。基于2014—2020年无效宣告数据的经验证据表明：投资者对发起专利无效宣告公司有显著正向市场反应,而对专利被无效宣告公司有显著负向市场反应;无效宣告的专利质量越高,投资者的市场反应越大,说明专利质量强化了投资者对专利无效宣告双方公司的市场反应;投资者对专利无效宣告双方公司的市场反应主要体现在专利数量较多组、行业收入占比较高组以及高科技公司组中,说明行业专利竞赛策略、势态以及激烈程度影响投资者对专利无效宣告公司的市场反应。研究有助于丰富专利竞赛和市场反应方面的文献,同时对于加强专利竞赛行为的监管具有借鉴意义。     

Patents,trademarks, and their complementarity in venture capital funding

This paper analyzes the effects of patents and trademarks in the financing of start-ups through venture capitalists (VCs). Patents and trademarks signal a start-up's technological and marketing capabilities. We find that patents and trademarks not only have direct effects on venture capital financing but also have complementary effects. Start-ups that apply for both patents and trademarks yield higher VC funding than do those firms that apply for only one of the two IP rights. Furthermore, we find that the complementarity between patents and trademarks exists only in initial VC funding rounds. Our results suggest that early-phase start-ups seeking their initial VC funding do best when stressing both their technology and marketing capabilities. Accordingly, entrepreneurship policy should encourage start-ups to build both technological and marketing capabilities.     

Incremental Organizational Change in a Transforming Society: Managing Turbulence in Hungary in the 1990s

The rapid liberalization of the former state socialist economies of Eastern Europe coupled with privatization were thought by many in the early 1990s likely to generate effective capitalist firms quite quickly. However, the radical institutional transformation and collapse of Soviet markets resulted in considerable uncertainty for most companies which, together with high sunk costs and lack of resources, inhibited organizational restructuring and strategic change. Despite high levels of foreign ownership and control by the mid-1990s, many Hungarian companies continued to produce much the same kinds of products for mostly the same customers with inputs from mostly the same suppliers as in 1990. While most had reduced employment substantially, and many had disposed of ancillary organizational units, the bulk of the companies considered here had not greatly altered their work systems and overall organizational structures. In the few enterprises where the production process had been extensively reorganized by 1996, this was funded and directed by foreign firms who had taken them over. These foreign firm-controlled companies also tended to have new top managers from outside the enterprise. They additionally introduced new products more often than Hungarian firms, albeit within rather narrow product lines that usually dominated the domestic market. Overall, most of the enterprises studied were still doing much the same set of activities in the mid-1990s, though with fewer staff, as at the start of the decade, and privatization per se had not led to major shifts in enterprise structure and strategy, nor did it seem likely to do so in the foreseeable future.     

Financial bootstrapping and venture development in the software industry

Access to finance has been identified as a significant constraint on the development of technology-based businesses. Although important, institutional venture capital and business angel finance are used by only a small proportion of new and growing ventures. The role of bootstrapping – defined here as access to resources not owned or controlled by the entrepreneur – has been largely overlooked in studies of small firm financing. This paper redresses this omission by analysing the role and importance of bootstrapping in product development and business development in the independently-owned software industry. Results from two regions of the UK – Northern Ireland and South East England – are compared with equivalent data from the USA (Massachusetts). Overall, bootstrapping techniques are less extensively used in the Northern Ireland industry than in South East England, and in both regions bootstrapping is less common than in Massachusetts. This may account for the smaller employment size, growth profile and stronger service/consulting orientation of these firms. Moreover, there appear to be considerable variations in the use of bootstrapping. Larger firms tend to make more use of bootstrapping for product development, and consider it more important than do smaller firms, who more highly value business development-related bootstrapping. Small firms are also more likely to use and value cost-reducing bootstrapping techniques, whereas larger firms make more use of the exploitation of value-chain based relationships.     

融资约束与企业并购——来自中国上市公司的经验证据

利用2010—2018年中国沪深A股上市公司的并购数据,采用Logistic回归和双重差分估计法研究融资约束对企业并购的事前选择效应及并购对目标方融资约束的事后处理效应。研究结果表明：（1）在融资能力方面具有优势的企业更有可能成为潜在的收购方,且其更偏好于收购融资约束程度与自身存在差异（高于自身）的中等规模企业;（2）并购后,目标方的融资约束程度总体上显著降低,但不同成长能力和所有权性质的企业存在异质性,对于非国有企业和成长能力较高的企业,并购带来的融资约束缓解效应更显著。研究结论表明,通过缓解目标方融资约束获得协同效应是企业并购的重要驱动力。