Technology Entry in the Presence of Patent Thickets

We present an empirical analysis of the effects of patent thickets at the European Patent Office on entry into patenting by UK firms. Using a direct measure of patent thicket density, we provide evidence for the existence and growth of patent thickets in specific industries, notably in telecommunications, audiovisual technology, and computer technology. Our analysis indicates that the density of patent thickets is associated with reduced entry into patenting in the particular technology area (controlling for the level of patenting in that area). We find this effect to be particularly pronounced for electronics and telecommunications. It is also stronger for smaller than for large companies. We are grateful to the Intellectual Property Office of the United Kingdom for research support and to the National Institute of Economic and Social Research for hospitality while this paper was being written. The views expressed here are those of the authors. They are not necessarily those of the UK Intellectual Property Office or NIESR. The revision of this paper has benefitted from comments by participants in seminars at the UKIPO, the USPTO, and the University of California at Berkeley. *Corresponding author: [email protected] 08 Fall