TY  - JOUR
AU  - Lampe,Ryan L.
AU  - Moser,Petra
TI  - Do Patent Pools Encourage Innovation? Evidence from the 19th-Century Sewing Machine Industry
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15061
PY  - 2009
Y2  - June 2009
UR  - http://www.nber.org/papers/w15061
L1  - http://www.nber.org/papers/w15061.pdf
N1  - Author contact info:
Ryan L. Lampe
DePaul University
1 East Jackson Blvd
Suite 6200
Chicago, IL 60604
E-Mail: rlampe@depaul.edu

Petra Moser
Department of Economics
Stanford University
579 Serra Mall
Stanford, CA 94305-6072
Tel: 650-723-9303
Fax: (650) 725-5702
E-Mail: pmoser@stanford.edu
AB  - 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.
ER  -