Patent Quality Intellectual Property Rights and Technology Transfer

Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family? Dr. Amanda Phalin Department of Finance, Insurance and Real Estate

Introduction n Importance of green technologies increasing l. Durban Conference and COP 21 (U. N. Climate Conference) highlighted concern with facilitating transfer of climate-change mitigating tech l. Legally binding agreements commit countries to reducing CO 2 -causing emissions Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Introduction n Solar technology: Prices falling expanding market l. Global patenting in green tech ↑ ~20%/year between 1997– 2008 l. Solar investments ↑ ~30% between 2013– 2014 l. Solar PV capacity ↑ ~25% between 2014–-2015 l. Size of solar PV market 10 x larger than last decade Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Introduction n Important questions emerge: l. Do stronger IPR laws facilitate more transfer of solar technology? l. Are higher-quality patents more likely to be filed abroad? n Turns out… l. Answer depends on how “patent flows” are defined Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Organization n (1) n (2) n (3) n (4) n (5) What we know (aka, lit review) Patent equivalents vs. extended patent families Description of Study Results Conclusion Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

What We Know n Patent citations are good measure of patent quality and patent value l. Forward vs. backward citations l. Weighted better n Strengthening IPR laws has mixed effect on patent flows l. Positive effect in middle- and high-income nations; no or negative effect in poor nations l. Sector effects can differ Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

What We Know n Disaggregated better l. Consider separate industries l. Consider similar countries n In green sector, strengthened IPR laws have mixed results depending on type of technology l. Positive, SS: wind, solar, hydro l. No effect: biomass, geothermal, waste Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Patent Equivalents vs. Extended Patent Families n No legal definition of these: Each organization (e. g. , USPTO, EPO, WIPO, OECD) creates its own n Data for this study from European Patent Office (EPO) n EPO patent equivalents: Documents whose priorities are same l. In other words, same declaration of priority, or patent document, has been filed in more than one place l. AKA patent-to-patent or a “simple patent family”* Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Patent Equivalents vs. Extended Patent Families n EPO extended patent families: comprises “all the documents sharing – directly or indirectly (e. g. via a third document) – at least one priority. This includes all the patent documents resulting from a patent application submitted to a patent office as a first filing and from the same patent application filed within the priority year with a patent office in any other country”* n Wider definition than equivalent Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Patent Equivalents vs. Extended Patent Families • D 2–D 3: Equivalents, or simple family, because they share same priorities, P 1 and P 2 • Extended families (last column) are much broader and include documents that are only indirectly linked to one another Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Patent Equivalents vs. Extended Patent Families • D 2 -D 4 are in the same family (P 2) because they share at least one priority with another member • BUT only D 2 and D 3 are associated with P 1, but D 4 is not • Yet, because of this indirect relationship, D 2 and D 4 are in the same family Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Patent Equivalents vs. Extended Patent Families • Research has shown that extended families may cover completely different inventions that are related only by sector Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Patent Equivalents vs. Extended Patent Families n Which is better? n Equivalents: Compare patent-to-patent, so researchers can follow trail of small piece of tech globally, from patent office to patent office l. But products rarely contain only one patent l. If intent is to track transfer of complete invention, equivalents may not be best method l. Equivalent method could result in over-counting of technologies Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Patent Equivalents vs. Extended Patent Families n Which is better? n Extended families: Compare technology-to-technology to track completed invention globally l. Families are defined differently office to office l. Indirect relationships determine family l. Patents in family may not actually related l. Not tracking one technology or invention Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Description of Study n Based on theoretical and econometric framework of Gallini et al. (2006) n Dependent variable pijt: Number of patents filed from country i (U. S. ) in country j in year t n pijt has high number zeros, so use negative binomial specification Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Description of Study n Variables of interest: n qual: weighted proxy for aggregate quality of patents being filed in country j from U. S. in year t n Equal to total number of citations received by all patents from U. S. filed in country j in year t divided by total number of patents filed in country j in year t n Theory predicts + effect Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Description of Study n Variables of interest: n ipr: Ginarte and Park index, measures “how strongly patent rights will be protected”* in a given country n Scale is measured from 0 to 5, with 0 representing the weakest patent laws and 5 representing the strongest patent laws n Expect + results (due to high level of R&D investment required) Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Description of Study n Control variables: n gdp: GDP and per capita GDP (+) n humk: Measure of human capital (+) n dist: How close countries are (-) n imps: Bilateral trade flows (+) n lang: Dummy indicating whether country j has English as official language (+); measure of cost n renew: Dummy indicating whether country has pro-greenenergy policies (+) n sun: Average hours sunshine per year (+) Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Results Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

n Three analyses for Results each dataset: n w/o sun variable n w/sun and sun_qual interaction term n No overlap in results for variables of interest Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Conclusion n Do strengthened IPR laws lead to more solar patenting abroad? n Equivalents: NO. IPRs have no effect n Extended families: YES. IPRs facilitate transfer of green tech Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Conclusion n Are higher-quality solar patents more likely to be filed abroad? n Equivalents: YES n Families: MAYBE, in countries with more sunshine on average Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Conclusion n What accounts for differences? n Might expect that because extended family dataset has more patents being filed on average, and a much larger average quality measure than equivalents data … n Quality variable would yield a statistically significant result in extended family group n However… Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Conclusion n Two case studies* n Extended families data contain a significant amount of “noise” that most likely affects results l(1) In large patent families, only a few patents account for large majority of citations l(2) Only a few families in aggregate country quality measure account for majority of citations n Even though total number of citations and patents filed is, on average, much larger, quality measure (ratio of citations/patents filed) is in reality much smaller Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Conclusion n When extended families data re-run without large outliers in quality measure… n Results same in terms of sign, coefficient size, and significance n Mean of pijt is higher, so effects at mean may be larger n Ergo, controlling for “noise” doesn’t seem to resolve different results Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Conclusion n But equivalents may not be better n Over-counting could inflate both citations and results n Solutions/Future Research: l. Conduct same analysis for other groups of countries, not just high income, and see if differences persist l. Compare all individual patents contained in each dataset; beyond scope of this study l Use “expert-validated families based on novel technical content”* to more clearly define families and their technologies l. Use firm-level data; may not be available, reliable from public sources Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

Conclusion n Question of equivalents vs. extended patent families is of vital importance to current and future policies designed to increase access to climate-change-mitigating technologies n Results presented here should give patent researchers pause, and encourage us all to consider more carefully how we define and use our data Patent Quality, Intellectual Property Rights, and Technology Transfer in the Solar Sector: All in the Family?

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