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Patenting inventions or inventing patents? Continuation practice at the USPTO (with Cesare Righi)

Continuations allow inventors to add new claims to old patents, leading to concerns about inadvertent infringement and holdup. We study the use of continuations to obtain standard essential patents (SEPs), a setting where patents are easily linked to possibly infringing technology. Continuation filings increase after standard publica- tion. This effect is larger when patent examiners are more lenient, and for applicants with licensing-based business models. Claims of SEPs also become more similar after standard publication, and late claiming is positively correlated with litigation. Our findings suggest widespread use of continuations to "invent patents" that are infringed by already-published standards.

Representation is Not Sufficient for Selecting Gender Diversity (with Justus Baron, Bernhard Ganglmair, Nicola Persico and Emanuele Tarantino)

Representation of women and minorities in a "selectorate" — the group that chooses an organization’s leaders — is a key mechanism for promoting diversity. We show that representation, on its own, is not sufficient for selecting gender diversity: a supportive organizational culture is also required. In the case of the Internet Engineering Task Force, a random increase in female representation in its selection committee caused an increase in female appointments only after cultural norms supporting diversity and inclusion became more salient.

Learning When to Quit: An Empirical Model of Experimentation (with Bernhard Ganglmair and Emanuele Tarantino)

Motivated by a descriptive analysis of standards development within the Internet Engineering Task Force, we develop a dynamic discrete choice model of R&D that highlights the decision to continue or abandon a line of research. Our estimates imply that sixty percent of IETF proposals are publishable, but only one-third of those good ideas survive the review process. Increased attention and author experience are associated with faster learning. We simulate two counterfactual innovation policies: an R&D subsidy and a publication-prize. Subsidies have a larger impact on research output, but prizes perform better when accounting for researchers’ opportunity costs.

Competing or Complementary Labels? Estimating Spillovers in Chinese Green Building Certification (with Xia Li)

Many markets have multiple voluntary certification programs that sellers use to signal product or organizational quality. We argue that there can be positive spillovers in the adoption of ``competing'' certification programs, and propose a framework for understanding how such spillovers arise through three channels: suppliers, adopters, and users of various labels. Our empirical analysis demonstrates these effects in the context of Chinese green-building certification. Specifically, we measure spillovers from adoption of the Chinese Green Building Evaluation Label (GBEL) to adoption of the alternative Leadership in Energy and Environmental Design (LEED) standard within the same region. To isolate the causal impact of GBEL on LEED adoption, we use local government subsidies as an instrumental variable. We find evidence of market-level spillovers through the supplier and user channels, but little evidence of building-level scope economies.

Does Earnings Management Matter for Strategy Research? (with Anthony Gibbs and Dave Waguespack)

Strategic management research frequently seeks to explain variation in organizational performance using metrics such as accounting profits scaled by firm assets (ROA). A concern with accrual-based accounting methods, perhaps best illustrated by a large discontinuity in the distribution of ROA around zero for U.S. public firms, is that operational and accounting practices will artificially inflate/deflate accounting profit. In this manuscript we establish that such earnings management is common, introduces non-classical noise, and distorts our understanding of broad drivers of firm performance. We conclude with analysis showing that an alternative performance measure, Cash Flows from Operations on Assets (OCFOA), offers a robust vehicle for checking results using accounting profits.

Effects of Content Sourcing Strategy on Online News Subscription (with Xiaoli (Richard) Yang and Nachiketa Sahoo)

Declining circulation and advertising revenue have led many newspapers to shrink their in-house staff and rely more on content sourced from external wire agencies. In this study, we analyze how the mix of in-house and wired content impacts online readers’ subscription decisions using clickstream data from a large regional U.S. newspaper. To control for sample selection that may occur if readers visit the site on days with their preferred content, we use local precipitation as an excluded variable that indirectly randomizes their exposure to content from these two sources. We find that publishing 10 additional in-house articles a day would increase a reader’s rate of subscription by 15 percent relative to the baseline subscription rate. Publishing 10 additional wired articles a day, on the other hand, would decrease the subscription rate by 11 percent. Effects of content in some categories within each source go against the overall trend. Producing more General News, Sports, and Entertainment articles, and wiring more Business articles increase subscription. In contrast, publishing more Lifestyle, Health, and Food articles do not encourage subscriptions, regardless of their sources. These results suggest that there exist opportunities for newspapers to increase subscriptions by carefully publishing the right content from the right source.

Disclosure Rules and Declared Essential Patents (with R. Bekkers, C. Catalini, A. Martinelli and C. Righi)

Many standard setting organizations (SSOs) require participants to disclose patents that might be infringed by implementing a proposed standard, and commit to license their essential patents on terms that are at least fair, reasonable and non-discriminatory (FRAND). Data from these SSO intellectual property disclosures have been used in academic studies to provide a window into the standard setting process, and in legal proceedings to assess parties’ relative contributions to a standard. We develop a simple model of the disclosure process to illustrate the link between SSO rules and patent-holder incentives, and examine some of the model’s predictions using a novel dataset constructed from the disclosure archives of thirteen major SSOs. The central message of the paper is that subtle differences in the rules used by different SSOs can influence which patents are disclosed, the terms of licensing commitments, and ultimately long-run citation and litigation rates for the underlying patents.

 

Alternative Versions and Other Writing

Can standard setting organizations address patent hold­up? Comments for the Federal Trade Commission

This essay describes the problem of patent hold-up that can arise when firms own patents that are essential to an industry stadnard and fail to negotiate an ex ante license with implementers. I discusses a number of steps that standards setting organizations and government regulators might take to alleviate this problem.

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