Does Formal Intellectual Property Impact The Market For Scientific Collaboration? Evidence From Patent-Paper Pairs

Caught an interesting presentation at DRUID by Scott Stern of an interesting paper he’s been working on with Fiona Murray entitled: Does Formal Intellectual Property Impact The Market For Scientific Collaboration? Evicence From Patent-Paper Pairs.

Take-away: 1 in 9 research projects considered is not taken forward because of patent issues (remember this doesn’t mean a reduction in the number of research projects but just that there is substitution)

Full Paper

Abstract

Cumulative scientific research depends on access to inputs associated with prior discoveries, such as databases, research tools and models, and organic materials. While follow-on researchers may be able to limit the price of access to these inputs to providing an appropriate citation, input developers may seek to use their control rights over such inputs to extract additional concessions from follow-on researchers, including co-authorship of followon research articles. By obtaining formal intellectual property rights over nowledge disclosed in scientific publications, input developers may seek to enhance their bargaining power in the market for scientific collaboration. One implication of such rent-seeking is the creation of “patent-paper pairs,” in which a given discovery is instantiated as both a scientific research article and in the form of a patent disclosure. This paper investigates the impact of these IP rights on the market for scientific collaboration. To do so, we exploit the fact that patents are granted with a substantial lag, often many years after the knowledge is initially disclosed through paper publication. Since patent applicants cannot enforce rights over knowledge until their patents are actually granted, authors of patent-paper pairs experience an enhancement in their bargaining power with potential collaborators after a patent is granted. To evaluate the equilibrium implications of these shifts in bargaining power, we examine how the pattern of scientific citations to a research article changes after patent rights over the knowledge in that article are granted. Employing a differences-in-differences estimator for XXX patentpaper pairs (and including a control group of publications from the same journal for which no patent is granted), we find evidence that patent grant results in a sharp reduction in the number of citations from “independent” research teams and an increase in citations associated with “collaborative” research teams. These shifts are particularly important for follow-on articles published by public sector authors, etc. Overall, the evidence suggests that scientists use intellectual property to enhance their market power in the market for scientific collaboration.