Patents, Freedom to Operate, and Follow-on Innovation: Evidence from Post-Grant Opposition

• 成果类型: Article
• 署名作者: Gaessler, Fabian; Harhoff, Dietmar; Sorg, Stefan; von Graevenitz, Georg
• 署名单位: Pompeu Fabra University; Barcelona School of Economics; University of Munich; Centre for Economic Policy Research - UK; University of London; Queen Mary University London
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2019.02294
• 发表日期: 2025
• 关键词: Follow-on innovation; freedom to operate; Licensing; patents; opposition

摘要

We study the blocking effect of patents on follow-on innovation by others. We posit that follow-on innovation requires freedom to operate (FTO), which firms typically obtain through a license from the patentee holding the original innovation. Where licensing fails, follow-on innovation is blocked unless firms gain FTO through patent invalidation. Using large-scale data from post -grant oppositions at the European Patent Office, we find that patent invalidation increases follow-on innovation, measured in citations, by 16% on average. This effect exhibits a U -shape in the value of the original innovation. For patents on low -value original innovations, invalidation predominantly increases low -value followon innovation outside the patentee's product market. Here, transaction costs likely exceed the joint surplus of licensing, causing licensing failure. In contrast, for patents on high -value original innovations, invalidation mainly increases high -value follow-on innovation in the patentee's product market. We attribute this latter result to rent dissipation, which renders patentees unwilling to license out valuable technologies to (potential) competitors.