Motivation Research Question

1 Complementarity and Substitution between Types of Intellectual Property in Software Stuart Graham DuPreeCollege, Georgia Institute of Technology stuart.graham@dupree.gatech.edu Deepak Somaya R.H. Smith School, University of Maryland dsomaya@rhsmith.umd.edu OECD 2003 Conference: IPRs, Innovation, and Economic Performance Graham-Somaya Motivation • U.S. Legitimationof patent protection for software by the early 1990s –Policy debate (ongoing) • Explore relationships between different types of IP use within firms –Relatively unexplored question –Software is a particularly good candidate • Patent, Copyright, and Trademark are available Graham-Somaya

Research Question(s) • What are the characteristics, and determinants, of IP litigation in software? • Do different types of IP protection (in software) serve as complements or substitutes? 2 Graham-Somaya Background: Primary focus patent/secrecy • IP Types as Substitutes: – Supreme Court Kewanee Oil decision (1974) – Theory suggests other types of IP may substitute for patent when patent fails, is uneconomical (Horstmann, et al. 1985; Friedman, et al. 1991) – (scant) Evidence (Levin, et al. 1987) that firms’use of appropriability mechanisms grouped into patent and non-patent (latter incl. secrecy) • IP Types as Complements: – More nuanced view, “bundle”of rights – Cohen, Nelson, Walsh (2000) show that while patenting distinct from other capabilities, secrecy may be pursued in concert with either – Arora(1997) suggests different IP used for different knowledge – Graham (2003) shows firms pursue secrecy strategies as a part of patenting Graham-Somaya Software: Complements or Substitutes? • Substitutes (policy debate): – Patent better (worse) suited to software than copyright (CONTU, 1979; Samuelson, 1984; Menell, 1987) – Graham/Mowery (2003) show “crossing propensities” • Complements (overlap; protect diff’t“things”): – Patents for “ideas”-Copyright for “expressions” • Patents for technologies, Copyrights for products – Patent protection => success; attracts “pirates” (needing...

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