How do non-practicing entities (“Patent Trolls”) impact innovation and technological progress? We employ unprecedented access to NPE-derived patent and financial data and a novel model to answer this question. We find that NPEs tend to acquire litigation-prone patents from small firms and acquire patents less core to the seller’s business. When NPEs license patents, those that generate higher fees are closer to the licensee’s business and more litigation-prone. More- over, downstream innovation drops when patents are acquired by NPEs. Quantitatively, the overall impact of NPEs depends on the share of infringements that come from non-innovating producers.

More Research From These Scholars

BFI Working Paper May 20, 2020

Taxation and Innovation: What Do We Know?

Ufuk Akcigit, Stefanie Stantcheva
BFI Working Paper Apr 27, 2018

Innovation and Trade Policy in a Globalized World

Ufuk Akcigit, Sina T. Ates
Topics:  Fiscal Studies
BFI Working Paper Nov 29, 2017

Innovation, Reallocation, and Growth

Daron Acemoglu, Harun Alp, Nicholas Bloom, William Kerr, Ufuk Akcigit
Topics:  Fiscal Studies