NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Do Patent Pools Encourage Innovation? Evidence from the 19th-Century Sewing Machine Industry

Ryan L. Lampe, Petra Moser

NBER Working Paper No. 15061
Issued in June 2009
NBER Program(s):Development of the American Economy, Law and Economics, Productivity, Innovation, and Entrepreneurship

Members of a patent pool agree to use a set of patents as if they were jointly owned by all members and license them as a package to other firms. Regulators favor pools as a means to encourage innovation: Pools are expected to reduce litigation risks for their members and lower license fees and transactions costs for other firms. This paper uses the example of the first patent pool in U.S. history, the Sewing Machine Combination (1856-1877) to perform the first empirical test of the effects of a patent pool on innovation. Contrary to theoretical predictions, the sewing machine pool appears to have discouraged patenting and innovation, in particular for the members of the pool. Data on stitches per minute, as an objectively quantifiable measure of innovation, confirm these findings. Innovation for both members and outside firms slowed as soon as the pool had been established and resumed only after it had dissolved.

download in pdf format
   (286 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w15061

Published: The Journal of Economic History, Volume 70, Issue 04, pp 898-920. December 2010

Users who downloaded this paper also downloaded* these:
Kortum and Lerner w6204 Stronger Protection or Technological Revolution: What is Behind the Recent Surge in Patenting?
Fraumeni w14736 The Contribution of Highways to GDP Growth
Atack, Haines, and Margo w14410 Railroads and the Rise of the Factory: Evidence for the United States, 1850-70
Farmer, Zha, and Waggoner w14710 Understanding Markov-Switching Rational Expectations Models
Lerner, Tirole, and Strojwas w9680 Cooperative Marketing Agreements Between Competitors: Evidence from Patent Pools
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us