Research Papers

Intellectual Property and Firm Strategy

• Don’t Fence Me In: Fragmented Markets for Technology and the Patent Acquisition Strategies of Firms (forthcoming, Management Science)

• Patent Litigation in the US Semiconductor Industry (book chapter)

• The Patent Paradox Revisited: An Empirical Study of Patenting in the US Semiconductor Industry, 1979-95 (Rand Journal of Economics)

• The Effects of Strengthening Patent Rights on Firms Engaged in Cumulative Innovation (book chapter)

The Absorption and Use of External Technologies

• Research Consortia and the Diffusion of Technological Knowledge: Insights from SEMATECH (working paper)

• Developing Next-Generation Lithography (Business and Politics)

• The Evolving Role of Semiconductor Consortia in the United States (California Management Review)

• Improving the Effectiveness of Public-Private R&D Collaboration: Case Studies at a US Weapons Laboratory (Research Policy)

• Technology Collaboration Between Industry and National Laboratories: Project Structure and Management (International Journal of Industrial Engineering)

• Enduring Dilemmas in U.S. Technology Policy (California Management Review)

Ziedonis, R.H. 2003. “Don’t Fence Me In: Fragmented Markets for Technology and the Patent Acquisition Strategies of Firms.” forthcoming, Management Science.

This paper examines the conditions under which firms patent defensively to avoid being “fence in” by owners of technologies used, perhaps unknowingly, in the design or manufacture of their products. Combining insights from transaction cost theory with recent scholarship on intellectual property, I predict firms will patent more aggressively than otherwise expected when markets for technology are highly fragmented (i.e., ownership rights to external technologies are widely distributed); this effect should be more pronounced for firms with large investments in technology-specific assets and under a strong legal appropriability regime. Although these characteristics of firms and their external environments have been highlighted in the theoretical literature, prior research has not explored the extent to which such factors interact to shape the patenting behavior of firms. To empirically test these hypotheses, I develop a citations-based “fragmentation index” and estimate the determinants of patenting for 67 U.S. semiconductor firms during 1980-1994. Accumulating exclusionary rights of their own may enable firms to safeguard their investments in new technologies while foregoing some of the costs and delays associated with ex ante contracting.

Ziedonis, R.H. 2003. “Patent Litigation in the US Semiconductor Industry,” in Patents in the Knowledge-Based Economy,” W.A. Cohen and S.A. Merrill, eds., (Washington, D.C., National Academies Press).

In this paper, I trace patterns of patent litigation for 137 US semiconductor firms during 1973-2001. The chapter, which is part of a series of studies on the operation of the US patent system commissioned by the Board on Science, Technology, and Economic Policy of the National Academies, reports the descriptive findings from the research. Three main findings emerge: First, the incidence of patent litigation has increased in this industry—in line with broader trends revealed in other studies. More surprising is the active enforcement of patent rights by small firms within the industry. My results suggest that this high propensity of small firms to be involved in patent-related lawsuits stems less from the bargaining disadvantages they face due to small patent portfolios (as interpreted in prior research) and more from the fact that many small firms within the industry are “technology specialists” for whom exclusionary control over proprietary technologies is particularly important. Consistent with this view, I find that specialized “fabless” firms enforce on average 4 out of every 100 patents they own—a remarkably high litigation rate that resembles rates reported for specialized biotechnology firms. The chapter discusses these findings and also reveals what appears to be an active “market” for patents that pre-dates the filing of a lawsuit: In at least 30 percent of the cases identified, legal title to a litigated patent had been reassigned from the original inventor (or assignee) to one of the litigating parties—typically the plaintiff in a patent infringement suit.

Hall, B.H. and R.H. Ziedonis, 2001. “The Patent Paradox Revisited: An Empirical Study of Patenting in the US Semiconductor Industry, 1979-95,” Rand Journal of Economics, 32(1): 101-128.

We examine the patenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation. Recent survey evidence suggests that semiconductor firms do not rely heavily on patents to appropriate returns to R&D. Yet the propensity of semiconductor firms to patent has risen dramatically since the mid-1980s. We explore this apparent paradox by conducting interviews with industry representatives and analyzing the patenting behavior of 95 US semiconductor firms during 1979-95. The results suggest that the 1980s strengthening of US patent rights spawned “patent portfolio races” among capital-intensive firms, but also facilitated entry by specialized design firms.

Ziedonis, R.H. and B.H. Hall, 2001. “The Effects of Strengthening Patent Rights on Firms Engaged in Cumulative Innovation: Insights from the Semiconductor Industry,” in Entrepreneurial Inputs and Outcomes: New Studies of Entrepreneurship in the United States. Advances in the Study of Entrepreneurship, Innovation, and Economic Growth, vol. 13, G.D. Libecap, ed. (UK: Elsevier Science Ltd)

This chapter is a longer version of our “Patent Paradox” article published in RAND. We discuss the institutional shift in the US patent system and our interview results at greater length and provide additional empirical results that are referred to but not presented in the journal article. An appendix provides additional information about the sample firms and discusses some of the methodological trade-offs involved in the study.

Ziedonis, A.A., R.H. Ziedonis, and B.S. Silverman (2004). Research Consortia and the Diffusion of Technological Knowledge: Insights from SEMATECH (working paper).

We trace the diffusion of patented technologies from SEMATECH, one of the largest US research consortia formed in the past two decades. Operating since 1987, the consortium has devised several mechanisms with which to transfer the results of its research to member firms – including 2-year rotations to SEMATECH by employees of member firms, regular meetings among technical advisory boards and engineers, and opportunities for member firms to host particular projects. Using citations to 102 patents generated from SEMATECH research, we test the extent to which member firms build upon their collective research more extensively and quickly than firms that are not direct participants in the organization. Our evidence suggests that membership in the consortium does accelerate the absorption and use of patented technologies resulting from SEMATECH research. In contrast to prior studies, however, we find little evidence that spillovers associated with the research flow first to non-member firms located within the United States.

Link to pdf file: [To post in January]

Linden, G., D.C. Mowery, and R.H. Ziedonis, 2000. “National Technology Policy in Global Markets: Developing Next-Generation Lithography in the Semiconductor Industry,” Business and Politics; reprinted in M. Feldman and A.N. Link, eds., Science and Technology in the 21st Century: Toward a Global Policy Agenda (Norwell, Massachusetts: Kluwer Academic Publishers, 2001).

Since the late 1980s, the Cooperative Research and Development Agreement (CRADA) has been a prominent vehicle used to support collaboration between US federal laboratories and private firms. In this paper, we examine the structure and goals of one of the most ambitious CRADAs conducted to date, which is aimed at the development of next-generation lithographic technologies and involves three Department of Energy laboratories and leading US firms in the semiconductor industry. This large project is an important case study in “post-Cold-War” technology policy and government-industry collaboration. Although the EUV project represents significant improvements in the design and management of CRADAs, it also illustrates the inherent difficulties of balancing political and economic goals in complex technology development projects.

Ham, R.M., G. Linden, and M.M. Appleyard, 1998. “The Evolving Role of Semiconductor Consortia in the United States and Japan," California Management Review 41: 137-163, 1998.

This paper examines a new chapter in the history of large-scale semiconductor consortia in the United States and Japan. By focusing on two recently established consortia—the International 300mm Initiative (I300I) in the United States and Semiconductor Leading Edge Technologies, Inc (Selete)—we examine the changing role of governments and private firms in directing technology development in the semiconductor industry. Both I300I and Selete have been financed solely by member companies and are working with a global base of supplier firms, apparently heralding a sea change in relations between the semiconductor industry and national governments. We examine the factors that gave rise to these consortia—namely, the costly conversion to larger silicon wafers that alters many of the industry’s manufacturing technologies. We discuss the origins and structures of each organization and the unprecedented level of cooperation among leading semiconductor manufacturers that is taking place.

Ham, R.M. and D.C. Mowery, 1998. “Improving the Effectiveness of Public-Private R&D Collaboration: Case Studies at a US Weapons Laboratory,” Research Policy 26: 661-675; An earlier commentary based on this research was published as: Ham, R.M. and D.C. Mowery, 1995. “Improving Industry-Government Cooperative R&D,” Issues in Science and Technology (Summer): 67-73.

We present the results of the first systematic cases studies of Cooperative Research and Development Agreements (CRADAs) between private firms and one of the large US weapons laboratories, Lawrence Livermore National Laboratory (LLNL). The cases cover a diverse array of technologies and include firms that range considerably in size and internal R&D capabilities. Our study suggests that these collaborative agreements are most effective for projects that that draw on the historic missions and capabilities of the labs, rather than for ones focusing on civilian technologies with little relevance to these missions. We identify four areas that could improve the effectiveness of these public-private R&D collaborations and illustrate how evaluations of CRADAs that rely on quantitative estimates in the immediate aftermath of their completion can be unreliable and misguided.

Ham, R.M. and D.C. Mowery, 1997. “Technology Collaboration Between Industry and National Laboratories: The Importance of Project Structure and Management,” International Journal of Industrial Engineering Special Issue: Technology Transfer 4(4): 244-253.

In this paper, we discuss the structure and management of collaborative technology agreements between private firms and government laboratories. Our discussion is based on five R&D agreements, which we trace over two-year period. The case studies illuminate several factors that facilitate the successful completion of these projects, including selecting R&D projects of sufficient size to attract internal talent within the labs, ensuring that strong “project champions” exist within both the government and private sector partners, and complementing contracts governing intellectual property rights with mechanisms aimed at modifying and transferring the underlying technologies.

Ham, R.M. and D.C. Mowery, 1995. “Enduring Dilemmas in U.S. Technology Policy,” California Management Review 37:4; reprinted in G. Koopman and H. Scharrer, eds., The Economics of High Technology Competition and Cooperation in Global Markets. (Hamburg, Germany: HWWA - Institut für Wirtschaftsforschung, 1996); published in French as “La politique technologique de Clinton,” Politique Etrangere 4: 991 - 1004, 1995.)

This paper examines US policies aimed at stimulating the development and commercialization of technologies by firms. We argue that the global nature of competition in many sectors and the web of cross-border alliances among firms from different countries pose enduring challenges for US policies aimed at garnering domestic benefits. After discussing US policies aimed at strengthening intellectual property rights and stimulating the commercialization of technologies developed in government labs, we assess two prominent initiatives of the Clinton Administration – the flat-panel display initiative and the promotion of projection x-ray photolithography technology.