DO PATENT POOLS ENCOURAGE INNOVATION? EVIDENCE ...

DO PATENT POOLS ENCOURAGE INNOVATION 

EVIDENCE FROM 20 INDUSTRIES IN THE 1930S 

RYAN LAMPE, DE PAUL UNIVERSITY AND 

PETRA MOSER, STANFORD UNIVERSITY AND NBER 

NOVEMBER 4, 2011 

PRELIMINARY AND INCOMPLETE 

Patent pools, which allow competing firms to combine their patents as if they are 

a single firm, have become one of the most prominent mechanisms to address 

problems with the current patent system. Regulators expect pools to encourage 

innovation by limiting litigation risks for pool members and by lowering 

transaction costs and license fees for outside firms. There is, however, no 

empirical evidence on the effects of contemporary pools on innovation because 

modern pools are too recent to observe their effects on innovation. This paper 

investigates patent pools in 20 industries that formed from 1930 to 1938, the last 

golden age of patent pools before the current period. Difference-in-difference 

estimates across industries indicate a substantial decline in patenting after the 

formation of a pool. 

We wish to thank Eric Hilt, Tim Simcoe and seminar participants at DePaul, Loyola, the NBER, 

and Stanford for helpful comments. Librarians at the National Archives in Boston, Chicago, 

Kansas City, New York City, Riverside, and San Francisco were instrumental in facilitating access 

to primary documents. Siyeona Chang, Josh Wagner, Aleksandra Goulioutina, and Marina 

Kutyavina provided valuable research assistance.

Patent pools, which allow a group of firms to combine their patents as if they are 

a single firm, have become a prominent policy mechanism to resolve litigation 

and blocking patents when competing firms own overlapping patents for the same 

technology. For example, pools have been proposed as a means to prevent 

litigation over tablet computers, smart phones, and video compression 

technologies, and are expected to facilitate licensing and encourage scientific 

progress in molecular diagnostic testing for breast cancer and treatments for HIV, 

cholera, and malaria. 1 

Enthusiasm for pools is fueled by the expectation that pools encourage the 

adoption of new technologies and encourage investments in R&D. For example, 

pools are expected to reduce litigation risks and facilitate production when 

competing firms own blocking patents for complementary technologies (Shapiro, 

2001; Lerner and Tirole, 2004). “In a case involving blocking patents, such an 

arrangement is the only reasonable method for making the invention available to 

the public” (International Mfg. Co. v. Landon, 336 F.2d 723, 729 (9th Cir. 1964)). 

Pools that combine complementary patents are also expected to reduce license 

fees for outside firms as they avoid “royalty stacking,” which occurs when each 

patent owner individually charges license fees that are too high compared to the 

1 For example, the Medicines Patent Pool, a pool developed by UNITAID to improve access to 

HIV treatments in developing countries, recently announced its first licensing agreement with a 

pharmaceutical company, Gilead Sciences. In April 2010 MPEG LA, which previously organized 

patent pools for video compression standards, announced the development of a patent pool for 

diagnostic genetic tests. Finally, in August 2010 the Pool for Open Innovation against Neglected 

Tropical Diseases, announced Medicines for Malaria Venture’s contribution of patents for malaria 

treatments. 

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optimal price for the complete product (Merges, 1999; Shapiro, 2001, p.134; 

Lerner and Tirole, 2004). 2 

Patent pools may, however, also discourage innovation as they reduce the 

intensity of competition in an industry. Although these effects are difficult to 

examine with contemporary data, a patent pool in the 19 th -century sewing 

machine industry appears to have discouraged rather than encouraged innovation 

(Lampe and Moser, 2010). Pool members and outside firms patented less after 

the creation of the pool and only began to patent more again after the pool had 

dissolved. Improvements in the technical performance of sewing machines also 

slowed after the pool had formed and only increased again after it had dissolved. 

Moreover, the creation of a pool appears to have shifted innovation away from 

pool technologies and towards technologically inferior substitutes, where outside 

firms did not have to compete directly with the pool (Lampe and Moser, 2011). 

This paper examines patent data for 20 patent pools in the 1930s to 

investigate the effects of patent pools on innovation. 3 

Pools rose to prominence 

after 1917 when a congressional committee under Franklin D. Roosevelt 

encouraged the Wright brothers and their competitor Glenn Curtis to pool 

blocking patents that hindered the production of planes. With a patent pool, 

production increased from 83 planes in 1916 to 11,950 in 1918 (Stubbs, 2002). 4 

2 In contrast, pools that combine substitute patents may increase license fees (Lerner and Tirole, 

2004). 

3 Field (2003 and 2011) documents significant advances in total factor productivity across a broad 

range of industries in the 1930s. An analysis of patent data indicates that increases in chemical 

invention in the 1930s may be due to compulsory licensing, which allowed U.S. firms to produce 

German-owned inventions after World War I (Moser and Voena, 2011). 

4 The aircraft pool remained active until the 1975, when the Department of Justice dissolved the 

pool arguing that its cross-licensing agreement discouraged R&D (Bittlingmayer, 1988). 

2

In a 1931 decision on the Standard Oil pool for gasoline cracking, the 

Supreme Court effectively anticipated statements by 21 st century regulators: 

“An interchange of patent rights and a division of royalties according to the 

value attributed by the parties to their respective patent claims are frequently 

necessary if technical advancement is not to be blocked by threatened 

litigation. If the available advantages are open on reasonable terms to all 

manufacturers desiring to participate, such interchange may promote rather 

than restrain competition” (Standard Oil Co. of New Jersey v. United States 

283 U.S. 163 (1931), 167-168). 5 

The same judgment stipulates that cross-licensing agreements and pools only 

violate the Sherman Act, if the combination of patents allows owners to 

effectively dominate the industry: 

“But an agreement for cross-licensing and division of royalties violates the 

Sherman Act only when used to effect a monopoly, or to fix prices, or to 

impose otherwise an unreasonable restraint upon interstate commerce” 

(Standard Oil vs. United States (1931), p. 175). 

In the case of gasoline cracking, the Court held that the pool did not control the 

industry because it only controlled only 55 percent of output for cracked gasoline 

and 26 percent of total gasoline production (Standard Oil vs. United States 1931, 

p. 175-176.) 

In 1942, regulatory tolerance came to an end after the Supreme Court 

decided to break up the Hartford Empire pool, which had been formed by two 

glassware firms in 1924, and had grown to include more than 600 patents which 

covered the machines that produce 94 percent of glass containers in the United 

5 In 1902, the Supreme Court had upheld a pool for agricultural instruments (harrows, which are 

used to spread crop residue before planting because the “execution of these contracts did in fact 

settle a large amount of litigation.” (E. Bement & Sons v. National Harrow Company, 186 U.S. 70. 

91, 1902). Harrows are agricultural tools used to spread crop residue before planting; six 

companies with competing patents began to sue each other in the 1880s, before they formed a pool 

in 1890. National Harrow had grown to include 85 patents and 22 firms that covered over 90 

percent of the market. 

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States in 1938. The Supreme Court argued that Hartford Empire had discouraged 

invention and suppressed competition by imposing production quotas on its 

licensees and prevented them from adopting competing technologies (Harford 

Empire Co. v. U.S. 323 U.S. 386, 400 (Jan., 1945)). 

Courts then began to become more proactive forcing pools to license their 

patents (Vaughan, 1956, p. 50). In 1948, the Supreme Court argued that the 

ultimate question was whether 

“Two or more patentees in the same patent field may legally combine their 

valid patent monopolies to secure mutual benefits for themselves through 

contractual agreements, between themselves and other licensees, for control of 

the sale price of the patented devices” (United States v. Line Material Co., 333 

U.S. 287, 305 (1948)). 

At that time, the Court’s answer had become: 

“No case of this Court has construed the patent and antimonopoly statutes to 

permit separate owners of separate patents by cross-licenses or other 

arrangements to fix the prices to be charged by them and their licensees for 

their respective products. Where two or more patentees with competitive noninfringing 

patents combine them and fix prices on all devices produced under 

any of the patents, competition is impeded to a greater degree than were a 

single patentee fixes prices for his licensees. The struggle for profit is less 

acute. …The merging of the benefits of price-fixing under the patents restrains 

trade in violation of the Sherman Act in the same way as would the fixing of 

prices between producers of non-patentable goods” (United States v. Line 

Material Co. (1948), p. 311, emphasis added). 

After this, pools became uncommon until the Department of Justice approved the 

MPEG and DVD standards pools in 1997 and 1999. 

In the window of regulatory tolerance between the Great Depression and 

World War II, many patent pools formed, similar to today. The 20 pools in our 

sample extend through a broad range of industries including Phillips screws, 

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lecithin, variable condensers (used in radios), and stamped metal wheels (used in 

the production of automobiles). 6 

To investigate the effects of pools on innovation, our analysis compares 

changes in patent applications across technologies that were differentially affected 

by the creation of a pool. Baseline estimates compare changes in patent 

applications per year after the creation of a pool in USPTO subclasses that include 

an additional pool patent with changes in patenting in other subclasses in the same 

USPTO main class that do not include a pool patent. All specifications include 

subclass and year fixed effects, as well as differential time trends to control for 

changes in patenting that are independent of the creation of a pool. 

Pool patents are identified from primary documents at the National 

Archives in Chicago, Kansas City, New York City, and Riverside. Twenty patent 

pools that formed between 1930 and 1938 covered a total of 597 pool patents in 

371 USPTO subclasses. 

Data on changes in patenting include 472,303 U.S. patents between 1921 

and 1948 in 103 main classes that include at least one pool patent. We 

constructed these data through a search of the full text of all U.S. patent grants 

between 1920 to 1974 for subclasses and application years. An additional search 

captures all citations to the 472,303 patents in our data by patents that were 

granted after 1948. 

Estimates for the baseline specification imply that subclasses with an 

additional pool patent experienced a 17 percent decline in patenting after the 

6 Once complete, our data collection will include 10 additional pools (see data section), for which 

records are kept in a branch of the National Archives that we have not yet been able to access. 

5

creation of a pool for each pool patent. Results are robust to the inclusion of 

linear and quadratic time trends, controls for the age of the pool, binary 

specifications of the pool variable, and Poisson regressions to control for the 

count data nature of patents. 

A potential concern with the difference-in-differences estimate is that the 

creation of a pool may be an endogenous response to variation in rates of 

innovation across technologies and over time. Technologies that are more 

innovative may be more likely to be included in a pool (Shapiro, 2001; Dequiedt 

and Versaevel, 2007). Thus pool subclasses produce nearly 3 times as many 

patents before the creation of a pool compared with other subclasses in the same 

main class, so that baseline estimates may underestimate the real decline in 

patenting after the creation of a pool. 

Pools may also be formed in response to a decline in innovation, after a 

technology has matured. To investigate this, we estimate annual coefficients 

before and after the creation of a pool. Annual coefficients become negative and 

statistically significant six years after the creation of the pool, suggesting that the 

creation of a pool affected rates of invention, rather than the other way around. In 

fact, annual coefficients imply that the effects of a pool intensified over time. For 

example subclasses with an additional pool patent produced 13 percent in the first 

five years after a pool had formed, and 19 percent in years six to ten. 

A series of robustness checks confirm the main results. Estimates are 

robust to restricting the estimation to subclasses that include pool patents, Poisson 

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egressions that control for the count data properties of patent data, and alternative 

OLS and Poisson estimates that control for the quality of patents. 

Regressions that drop individual pools from the sample indicate that the 

observed effects are not driven by a single pool. Dropping aircraft instruments 

and variable condensers yields to the largest decline in estimated effects, but 

estimates remain large and statistically significant. Without aircraft instruments 

the estimated decline is -0.38 (instead of -0.45) patents per subclass and year; 

without variable condensers it is -0.42 patents per subclass and year. 

An additional test explores variation in the estimated decline across 

subclasses with a single pool patent and subclasses with two or more pool patents. 

In subclasses with one pool patent, the technology was already owned by a single 

firm so that the creation of a pool may not have had any direct effect (even though 

the technology may be affected by complementarities and spillovers from other 

subclasses). In subclasses with two or more pool patents, however, the creation of 

a pool may have affected the ownership structure, and eliminated competition. 

Consistent with this idea, patent data confirm that the decline in patenting after 

the creation of the pool was significantly stronger for subclasses that included two 

or more pool patents. 

Finally, a descriptive analysis examines correlations between the rate of 

decline in patenting and specific pool characteristics, such as their openness to 

licensing, grant-back rules that require members to offer all new patents to the 

pool (Lerner and Tirole, 2004), and the inclusion of members from other 

countries. Openness to licensing is correlated with a stronger negative effect, 

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while grant-backs and the presence of international members have no statistically 

significant effects. Historical court records indicate that fourteen pools restricted 

licensing, which is likely to have limited the potential for cumulative innovation 

(e.g., Moser and Voena, 2011), and ten pools actively prevented the entry of 

competitors. 

I. DATA 

The main data for this study consist of 472,303 applications for U.S. 

patents in 103 main classes that include at least one pool patent for a pool that 

formed between 1930 and 1938. The unit of analysis is the number of patent 

applications per subclass and year. Twenty pools covered a total of 597 patents in 

371 subclasses and 103 main classes; 45,546 subclasses in these main classes that 

that do not include a pool patent serve as the control. 

A. Pooled patents in 20 industries 

In the first step of the data collection, we collected all mentions of patent 

pools from Vaughan (1956), Gilbert (2004), and Lerner, Tirole and Strojwas 

(2007) and searched the records of the National Archives in Chicago, Kansas 

City, New York, and Riverside for lists of patents that formed each of these pools. 

Patents for 15 pools were listed in consent decrees, which required the pools to 

license their patents to outside firms. 7 

Patents for three pools were listed in 

7 A consent decree is granted by a court in place of a decision and based on an agreement already 

reached between the government and a defendant; it generally presents the minmum, which the 

Department of Justice is willing to accept in Lieur of a court decision (Vaughan 1956, p. 47) 

8

written opinions, and patents for two pools were listed in the original license 

agreements. 8 

Pools cover a diverse group of industries including hydraulic oil pumps 

for oil wells (1933-52), machine tools (1933-55, power-driven metal-cutting or – 

shaping machines), Philips screws (1933-49), variable condensers (1934-53, 

devices to select the incoming signal of a particular radio station in a radio set), 

wrinkle finishes, enamels and paints (1937-55), dropout cutouts (1938-48 devices 

to protect an electric circuit from shorts and overloads), and furniture slip covers 

(1938-49); Table 2 describes the use of each of these technologies in some detail. 

B. Variation in pool characteristics 

The average pool in the sample had 3.7 members and combined 30 patents 

in the initial agreement; the median pool combined 3 firms and 22 patents (Table 

1). Nine pools combined 2 firms, and the largest pool combined 16 (aircraft 

instruments); 3 pools combined 2 patents (slip covers, fuse cutouts, and Phillips 

screws), and the largest pool (aircraft instruments) combined 91 patents. 9 

8 In comparison with Vaughan (1956), our data omit a relatively short-lived pool for parking 

meters (1937-46). In comparison with Lerner, Strojwas and Tirole’s (2007) sample of 28 pools 

between 1930-39, our sample includes 8 additional pools, and currently omits 12 pools that were 

the subject of Congressional hearings but were not subject to antitrust litigation. We plan to 

collect these data from the regional depositories of the National Archives in Washington, DC, 

shortly. Our sample also excludes the 1937 male hormones pool because it lasted for fewer than 

10 years, and the 1931 pool for grinding hobs because it combined two patents by the same firm 

(the Barber-Colman Company); we also could not identify pool patents for two 1938 pools for 

pour depressants and induction heat treatments, and had to omit them. For long-lived pools, the 

data may miss patents that were included early in the pool, but had expired by the time the pool 

was litigated. In the 1930s U.S. patents were valid for 17 years from the date of issue; the average 

pool in the sample survived for 16 years, and the average age of the patents that it included at the 

date of its formation is 6 months. A visual check of the distribution of application years for all 

pool patents, however (Figure 7) reveals no obvious omission of early patents. 

9 Of the 20 pools in our sample, 14 pools had 2 or 3 member firms when they were dissolved 

suggesting little variation in the number of pool members. Estimates of (1) incorporating an 

9

Of the 20 pools that formed between 1930 and 1938, only 9 licensed their 

technologies to outside firms. Among the 9 pools that licensed, the average pool 

issued licenses to 31 firms. The pool with the smallest number (lecithin) had one 

licensee, the median (stamped metal wheels) had 11 licensees, and the pool with 

the largest number (wrinkle finishes) had 200 licensees (Table 1). Six pools 

(railroad springs, Phillips screws, stamped metal wheels, wrinkle finishes, fuse 

cutouts, and ophthalmic frames) licensed voluntarily to between 10 and 200 firms. 

The large majority of pools (14 out of 20) included implicit grant back 

rules, implying comparable shares to 73 percent of 63 pools between 1895 and 

2001 in Lerner, Strojwas, and Tirole (2007). Three other pools – textile 

machinery, stamped metal wheels, and wrinkle finishes - added large number of 

patents (179, 57, and 99, respectively), suggesting that they may have included 

implicit grant-back rules. 

Eighteen pools in our sample added patents after they had formed; the 

average pool added 78 patents while it was active, the median pool added 49 

patents, and the high-tension cables pool added 221 patents (growing from 73 

patents in 1934 to 294 in 1948). The average pool grew by 386 percent, the 

median by 50 and high tensions cables grew by 570 percent. 

All pools involved at least one domestic firm; seven pools also included 

foreign firms from Germany, the United Kingdom, France, Italy, Denmark, and 

Switzerland. 

interaction between pool*pool patents and pool members yields a coefficient of -0.014 and a 

standard error of 0.027. The estimated coefficient on pool*pool patents remains negative and 

significant (-0.375, significant at 1 percent level). 

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C. Patents Applications per Subclass and Year, 1921-1948 

Information on pool patents allows us to construct a data set of patent 

applications to examine the effects of patent pools on invention in affected 

industries. This data set covers 472,303 patent applications between 1921 and 

1948 in 103 main classes that included at least one pool patent. These data allow 

us to investigate changes in patenting per subclass and year in 45,917 subclasses 

at least ten years before and after the creation of each of the 20 pools in the 

sample, creating a total of 1,285,676 observations of patents per subclass and year 

(at 28 years of data). 

371 pool subclasses include at least one patent that was listed in the initial 

agreement. For example, U.S. patent 1,908,080 of the Philips screws pool falls 

into primary subclass 403 (“externally threaded fastener element”) and main class 

411 (“expanded…locked-threaded fastener”); all 667 subclasses in main class 411 

that do not include a pool patent serve as the control. 10 The average pool subclass 

produced 2.69 patents per year before a pool formed and 2.55 patents per year 

after the pool formed (Table 3). In comparison, other subclasses in the same main 

class produced 1.02 patents per year before the pool and 1.15 patents per year 

after the pool had formed. Restricting the sample to patents that were granted 10 

years before and after a pool formed, the average pool subclass produced 2.99 

patents before the pool formed and 2.66 years after the pool formed; in 

comparison, other subclasses in the same main class produced 1.09 and 1.15 

10 We exclude subclasses that do not register any patents between 1921 and 1948. 

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patents per year before and after the pool formed. 11 

The large majority of subclasses (283 out of 371) include only 1 pool 

patent; 88 pool subclasses (24 percent) include 2 or more pool patents. A small 

number of subclasses included 10 or more pool patents. 

To measure the timing of invention, we construct data on the timing of 

patent applications between 1921 and 1948 through a search for application years 

of the full text of patent grants between 1920 and 1974. Automatic key word 

searches parse the OCR text and extract filing years. For example, we searched 

the OCR text for the words “iling” (for “Filing”) and “Ser.” (for “Serial Number”) 

and then recovered the year associated with this block of text to extract the 

application year for each patent. Comparing the application and grant years for 

patents granted between 1921 and 1948 indicate that the average grant lag was 2.7 

years with a standard deviation of 1.9 years (Figure 1). 12 

D. Citations by later patent, 1948-2002 

To control for variation in the quality of patents, we collected data on the 

number of patents issued between 1921 and 1948 that were cited by later patents 

issued after 1948 (as a means to control for the quality of patents). Data on 

citations from patents issued between 1948 and 1974 is obtained from automatic 

key word searches of the full text of patent grants. Data on citations after 1974 

are available in the NBER patent data (Hall, Jaffe, and Trajtenberg, 2001). A 

11 For three subclasses that include patents from more than one pool, we choose the start year for 

the first pool that formed as the year of pool formation. 

12 This is comparable with Popp, Juhl, and Johnson’s (2004) finding that the average utility patent 

between 1976 and 1996 was granted 28 months after the application (with a standard deviation of 

20 months). 

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total of 298,503 patents in our data (63 percent of 472,303 patent applications 

between 1921 and 1948) were cited by at least one patent between 1948 and 

2002. 13 II. PRELIMINARY RESULTS 

A. Descriptive statistics 

In pool subclasses patenting declined from an average of 2.99 patents per 

year 10 years before the creation of a pool to 2.66 patents per year afterwards 

(Figure 3, Table 3). In a control group of other subclasses in the same main class 

patenting increases from 1.09 patents per year before the pool to 1.15 patents per 

year afterwards. 

This decline in patenting was stronger for subclasses with more than one 

pool patent. In pool subclasses with 1 pool patent, patenting declined only 

slightly from 2.60 to 2.47 patents per year; in subclasses with 2 pool patents 

declines from at 3.24 to 3.17, and in subclasses with 3 or more pool patents, 

patenting declined from 5.14 to 3.27 patents per year (Figure 4). 

B. Baseline estimates 

Difference-in-difference regressions across pools compare changes in 

patenting after the creation of a pool in subclasses that included pool patents with 

changes in patenting in a control group of patents in the same main class that did 

13 Patent citations are obtained from patents issued after 1948 when the USPTO began listing 

citations in a separate section of the patent grant. Before 1948 citations were only listed in the text 

of the patent making it difficult for an automated search to determine if a given number is a patent 

citation or, for example, a measurement relevant to the patent’s claims. 

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not include any patents that were included in a pool: 

(1) Patents ct = + 1 Pool t * Pool Patents c 

+ t * Pool Subclass c + t 2 * Pool Subclass c + f c + t + ct 

where pool patents ct counts patent applications in subclass c and year t; pool t 

equals 1 for period after the pool forms. 14 The variable pool subclass c equals 1 for 

subclasses that include one or more pool patents. Subclasses without pool patents 

in the same main class form the control. For example, pool subclass c equals 1 for 

the Philips screw pool subclass 411/403; other subclasses in main class 411 form 

the control. 

Under the identifying assumption that – in the absence of a pool – changes 

in the number of patents per year would be comparable in subclasses with pool 

patents and other subclasses in the same main class, the coefficient for the 

difference-in-differences estimator pool t *pool patents c measures the causal effect 

of the pool. Interaction terms t * pool subclass c and t 2 * pool subclass c control for 

separate linear and quadratic trends for subclasses with pool patents. f c are 

subclass fixed-effects and t are filing year fixed effects to control for variation in 

the intensity of patenting across technologies and over time. 15 

OLS estimates indicate that subclasses with one additional pool patent 

produce 0.45 fewer patents per year after the creation of a pool (significant at 1 

14 For five pools, the pool years include a small number of years after the pool had been dissolved. 

We include these years as pool years to estimate the pool effects in the most conservative ways 

(creating a bias towards zero. The pools are for fuel injection, pharmaceuticals, railroad springs, 

lecithin, and aircraft instruments. 

15 For example, some subclasses may include a disproportionate number of patents because they 

are especially hot areas of research activity, or inventors may be more likely to patent innovations 

in a specific subclass, if alternative mechanisms are ineffective (Moser, 2012). The number of 

patents in pool subclasses ranges from 1 to 57; the average per pool subclass is 3.0. 

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percent, Table 4, column 2). Compared with a mean of 2.62 patents per year in 

subclasses with pool patents between 1921 and 1948, this implies a 17 percent 

decline in patenting after the creation of a pool. 

C. Controlling for variation in technologically related technologies 

An alternative test compares changes in subclasses with pool patents with 

a more narrowly matched set of control subclasses that patent examiners identify 

as cross-reference technologies for pool patents. Specifically, patent examiners 

assign each patent to a primary subclass that includes the most important claim. 

(Claims describe the nature of the invention and delineate the areas that the 

inventor claims to cover with his invention.) If the patent includes claims in 

additional subclasses, these subclasses are selected as cross-reference subclasses.) 

The 597 pool patents in our data were assigned to 634 cross-reference 

subclasses, in addition to 371 primary subclasses. For example, examiners 

assigned U.S. patent 1,908,080 for the Philips screw to four cross-reference 

subclasses; one of these subclasses 411/919 is in the same main class. 

In the more narrowly matched control group of cross-reference subclasses in 

the same main class, patenting increases from 3.20 to 3.30 (Table 3). 

Controlling for the number of pool patents that list subclass c as a 

secondary, cross-reference subclass leads to a slight reduction in the estimated 

decline from -0.451 to -0.412, implying a 16 percent decline in patenting (Table 

4, column 3). 

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D. Controlling for the age of the pool and investigating pre-pool effects 

Estimates that control for the age of the pool suggest that the decline in 

patenting intensifies over time. In the first five years after a pool forms, 

subclasses that include an additional pool patent produce 0.33 fewer patents per 

year; between years 6 and 10, subclasses with an additional pool patent produce 

0.49 fewer patents, and between years 11 and 18, they produce 0.55 fewer patents 

(significant at 1 percent, Table 4, column 4). 

Alternative specifications estimate coefficients separately for each year, 

allowing coefficients for the pool period to be different from zero before the 

creation of a pool. 

(2) Patents ct = + k * Pool Patents c + t + f c + ct 

where k =-17,-16….17, 18, counts years before and after a pool forms. This 

approach makes it possible to investigate differential changes in patenting that 

precede the creation of the pool. For example, it addresses the issue that the year 

when a pool was created may be endogenous if firms decide to form a pool once 

the technology is mature and invention has begun to decline. 

Annual coefficient become negative and statistically significant six years 

after the creation of a pool, suggesting that patenting declined in response to the 

pool, rather than the reverse. In the ten-year period leading up to the pool, annual 

coefficients are not statistically significantly different from zero. Estimates of 

annual coefficients also confirm that the intensity of the decline increases over 

time, reaching 0.39 fewer patents 10 years after the creation of a pool (Figure 5). 

16

E. Binary pool variables 

We also replace the count variable for pool patents with a binary variable 

that distinguishes any subclass with pool patents from subclasses without pool 

patents in the same main class: 

(3) Patents ct = + 1 Pool t * Pool Subclass c + t * Pool Subclass c 

+ t 2 * Pool Subclass c + f c + t + ct 

where Pool Subclass equals 1 for subclasses that include at least 1 pool patent. 

This alternative specification eliminates differences between subclasses with 1 or 

more pool patents. The large majority of subclasses (283 out of 371) include only 

1 pool patent; 88 pool subclasses (24 percent) include 2 or more pool patents. A 

small number of subclasses include 10 or more pool patents. A total of 434 

subclasses include only 1 cross-reference patent (and no pool patent; 100 crossreference 

subclasses (19 percent) include 2 or more cross-reference patents 

(Figure 2). 

OLS estimates indicate that subclasses with pool patents produced 0.56 

fewer patents after the pool formed, implying a 21 percent decline in patenting 

relative to other subclasses in the same main class (significant at 1 percent, Table 

4, column 5). 

F. Separately estimating effects for subclasses with one or more pool patents 

17

A related test explores whether the decline in patenting was more 

pronounced for subclasses that included more than one pool patent. In subclasses 

with one pool patent, the technology was already owned by a single firm so that 

the creation of a pool may not have had any direct effect on invention. In 

subclasses with two or more pool patents, however, the creation of a pool may 

have combined two patents that were owned by competing firms before the 

creation of the pool. 

Patent data confirm that the decline in patenting after the creation of the 

pool was significantly stronger for subclasses that included two or more pool 

patents. Pool subclasses with one pool patent generated an average of 2.47 

patents per year in the first ten years after pool creation compared to 2.60 patents 

per year prior to pool creation; pool subclasses with 3 or more pool patents 

generated 3.27 patents per year compared to 5.14 patents per year prior to pool 

creation (Table 3). OLS estimates indicate that subclasses with 1 pool patent 

produced -0.36 fewer patents after the creation of a pool, while subclasses with 2 

pool patents generated 0.27 fewer patents and subclasses with 3 or more pool 

patents generated 2.02 fewer patents (significant at 5 percent, Table 5, column 2). 

G. Robustness checks 

The first robustness check restricts the sample to pool subclasses and 

cross-reference subclasses, effectively using cross-reference subclasses as the 

control for pool subclasses. Pool subclasses and cross-reference subclasses 

generated similar numbers of patents per year; in the ten years before the 

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formation of a pool, pool subclasses generated 2.99 patents per year while crossreference 

subclasses generated 3.20 patents per year (Table 3, Figure 3). 

Summary statistics indicate that patents per year in pool subclasses 

declined after the creation of a pool while patents per year in cross-reference 

subclasses increased. In the ten years after the creation of a pool average patents 

per year in pool subclasses declined from 2.99 to 2.66 while average patents per 

year in cross-reference subclasses rose from 3.20 to 3.30 (Table 3). OLS 

estimates confirm the decline; each pool patent was associated with 0.42 fewer 

patents while the pool was active (significant at 1 percent, Table 6, column 2), 

implying a 16 percent decline. 

Another test restricts the sample to patents that were cited by at least one 

patent issued between 1920 and 1974. Of 472,303 patents in 103 main classes 

with pool patents, 298,503 (63 percent) are cited at least once. Patent data 

indicate that the average number of patents per year in pool subclasses flattens 

after the formation of a pool compared to patents per year in cross-reference 

subclass (Figure 6). Cited patents per year in pool subclasses increase from 1.80 

in the ten years preceding the pool to 2.07 in the ten years after the pool; cited 

patents per year in cross-reference subclasses, in contrast, increase from 2.02 to 

2.65. 

OLS estimates for cited patents indicate that the decline in high-quality 

patents is slightly smaller than the decline in the full sample. Specifically, 

subclasses with one additional pool patent produced 0.17 fewer cited patents after 

the pool had formed (significant at 1 percent, Table 7, column 2). Compared with 

19

a mean of 1.93 cited patents per subclass with pool patents this implies a decline 

in patenting of 9 percent. 

An additional robustness check repeats our main specifications as Poisson 

regressions to control for the count data characteristics of patent data. Fixedeffects 

Poisson estimates imply that subclasses with one additional pool patent 

produced 10 percent fewer patents after the pool formed (exp(-0.098)-1=-0.10, 

significant at 1 percent, Table 8, column 2). 16 

A final robustness check drops individual industries from the sample. 

Specifically, we estimate equation (1) 20 times, each time excluding one pool 

from the sample. Dropping aircraft instruments and variable condensers yields to 

the largest declines in estimated effects, but estimates remain large and 

statistically significant. Without aircraft instruments the estimated decline is - 

0.38 (instead of -0.45) patents per subclass and year; without variable condensers 

the estimated decline is -0.42 patents per subclass and year (significant at 1 

percent, Table 9). In regressions that drop any other industry from the sample, the 

estimated decline in patenting remains larger than -0.38. 

IV. CORRELATION WITH POOL CHARACTERISTICS 

Was the decline in patenting stronger for larger pools or for pools that 

were less likely to license their technologies to outside firms This section 

presents descriptive evidence on the correlation between the decline in patenting 

and the characteristics of individual pools 

16 To calculate robust standard errors for Poisson regressions with subclass and year fixed effects 

we use STATA’s “xtpqml” coded by Tim Simcoe, based on Wooldridge (1999). 

20

Regulators argue that pools that do not license technologies freely may 

“pose a barrier to entry if existing relationships make it harder for ‘new firms to 

come in and overcome the patent thicket’” (Department of Justice and Federal 

Trade Commission, 2007). 

Data for pools in the 1930s, however, suggest that the decline in patenting 

was strongest for pools with a moderate number of licensees. If pools licensed to 

1 to 5 licensees technologies, subclasses with an additional pool patent produced 

12 percent fewer patents (exp(-0.12)-1=-0.12, significant at 1 percent, Table 10, 

column 5). For pools that licensed to more than 5 licensees, subclasses with an 

additional pool patent produced 9 percent (Table 10, column 5). Intuitively, the 

negative effect of a pool may be largest in industries where the demand for 

licensing is high, and member firms restrict access to licensing, so that the 

number of licensees is positive but small. 

Finally, we investigate whether pools with grant-backs and foreign 

members were associated with higher or lower patenting. OLS estimates indicate 

that grant-back provisions are associated with a larger decline in patenting (with 

an estimate of -0.12) but the coefficients are not statistically significant (Table 11, 

column 2). In fact, 14 of 20 pools include grant back rules, and 3 pools that did 

not have grant back rules had extremely low levels of patenting throughout the 

sample. In comparison, OLS estimates suggest that seven pools that included 

foreign members experienced a smaller decrease in patenting as a result of the 

pool, but results are also not statistically significant (Tables 12, column 2). 

21

V. ARCHIVAL EVIDENCE ON ANTI-COMPETITIVE PRACTICES 

Archival evidence makes it possible to shed some light on factors 

(unobservable in the patent data) that may have caused the decline in innovation. 

All 20 pools in our sample were subject to antitrust litigation; 18 were dissolved 

by regulators (Table 13). 17 

Court records suggest that pool members used pools 

as a means to protect profits and divide markets. Pools that licensed to outside 

firms imposed price-fixing conditions while those pools that did not license 

divided markets according to geography and technology. 

Of the 20 pools that formed between 1930 and 1938, only 9 licensed their 

technologies to outside firms. Six of these pools licensed freely (railroad springs, 

Phillips screws, stamped metal wheels, wrinkle finishes, fuse cutouts, and 

ophthalmic frames) to between 9 and 200 firms. 

Each of these pools was found guilty of price-fixing. For example, the 

price fixing agreements in a pool formed between two patentees of dropout 

cutouts in 1938 were held to be illegal ten years later in United States v. Line 

Material Co., 333 U.S. 287 (1948). One firm, Southern States Equipment, held a 

patent that blocked the patent assigned to Line Material Company. The two firms 

entered into an agreement whereby Line Material would be the exclusive licensor 

of Southern’s patent and Line Material was free to fix prices for devices that 

embodied both patents. 18 

17 The 1938 slip covers pool was dissolved independently of regulators in 1949 when one of the 

two founding members claimed the agreements was “induced by false and fraudulent 

misrepresentations” but the pool was found guilty of price fixing in 1956. The 1933 machine tools 

pool dissolved independently during antitrust proceedings in 1955 due to internal litigation 

between pool members over the terms of their agreement. 

18 United States v. Line Material Co., 333 U.S. 287 (1948). 

22

Eleven other pools operated like cross-licensing agreements, and did not 

grant licenses to any outside firms. 19 

For example, the hydraulic oil pumps pool 

that formed in 1933 attempted to limit competition by acquiring every important 

patent for oil pumps. 20 Similarly, the five members of the 1933 pool for machine 

tools divided their patents into fields of use and granted members exclusive rights 

to those fields. Although nine pools licensed to competitors, three of these pools, 

for, lecithin, variable condensers, and furniture slip covers, licensed to one, three, 

and two firms respectively to prevent regulatory intervention. For example, 

infringement suits against the variable condensers pool terminated in license 

grants (Vaughan, 1956, p. 52). 

Pools that included foreign firms (from Germany, the United Kingdom, 

France, Italy, Denmark, and Switzerland) divided world markets to prevent 

imports and fix prices. For example, leading manufacturers of water-conditioning 

products in the U.S., England, Germany, France, Belgium, and Spain assigned 

exclusive territories by granting each other the right to use the trade name 

“Permutit” in certain countries. Patent rights and technical information was not 

shared with outside manufacturers. 

REFERENCES 

Baron, Justus, and Tim Pohlmann. “Patent Pools and Patent Inflation.” CERNA 

Working Paper, 2010. 

19 These arrangements resembled cross-licensing agreements in which companies grant each other 

licenses that resolve blocking patents without licensing to other firms (Shapiro 2001). 

20 Kobe, Inc. v. Dempsey Pump Co., 198 F.2d 416 (10th Cir. 1952). 

23

Bessen, James. “Patent Thickets: Strategic Patenting of Complex Technologies.” 

Working Paper No. 0401, Research on Innovation, 2004. 

Bittlingmayer, George. “Property Rights, Progress, and the Aircraft Patent 

Agreement.” Journal of Law and Economics, 1998, 31(1), pp. 227-248. 

Cameron, Colin and Pravin Trivedi. Regression Analysis of Count Data. 

Cambridge, UK: Cambridge University Press, 1998. 

Carlson, Steven. “Patent Pools and the Antitrust Dilemma,” Yale Journal on 

Regulation, 1999, 16, pp. 359-399. 

Choi, Jay Pil. “Patent Pools and Cross-Licensing in the Shadow of Patent 

Litigation.” Michigan State University Working Paper, 2003. 

Department of Justice and Federal Trade Commission. “Antitrust Guidelines for 

the Licensing of Intellectual Property.” DOJ and FTC: 1995. 

Department of Justice and Federal Trade Commission. “Antitrust Enforcement 

and Intellectual Property Rights: Promoting Innovation and Competition,” 

Washington, DC: GPO, 2007. 

Department of Justice. Business Review Letter for DVD Standards Pool, June 10, 

1999 (http://www.usdoj.gov/atr/public/busreview/2485.htm). 

Department of Justice. Business Review Letter for RFID Patent Pool, October 

21, 2008 (http://www.usdoj.gov/atr/public/busreview/238429.pdf). 

Dequiedt, Vianney, and Bruno Versaevel. “Patent Pools and the Dynamic 

Incentives to R&D.” Working Paper No. 703, Groupe d’Analyse et de Théorie 

Économique, Université de Lyon, 2007. 

Field, Alexander. “The Most Technologically Progressive Decade of the 

Century.” American Economic Review, 2003, 93(4), pp. 1399-1414. 

Field, Alexander. “Chained Index Methods and Productivity Growth during the 

Depression.” Santa Clara University, Working Paper, 2011. 

Gilbert, Richard. “Antitrust for Patent Pools: A Century of Policy Evaluation.” 

Stanford Technology Law Journal, 2004, no. 3 (April 2004): 

http://stlr.stanford.edu/STLR/Articles/04_STLR_3 

Griliches, Zvi. R&D and productivity : the econometric evidence. Chicago: 

University of Chicago Press, 1998. 

24

Hall, Bronwyn. Adam B. Jaffe, and Manuel Trajtenberg (2001). "The NBER 

Patent Citation Data File: Lessons, Insights and Methodological Tools." NBER 

Working Paper 8498. 

Lampe, Ryan and Petra Moser. “Do Patent Pools Encourage Innovation 

Evidence from the 19 th -Century Sewing Machine Industry” The Journal of 

Economic History, 2010, 70(4), pp. 871-897. 

Lampe, Ryan and Petra Moser. “Patent Pools and the Direction of R&D” 

(December 20, 2010). Available at SSRN: 

http://papers.ssrn.com/sol3/papers.cfmabstract_id=1468062 

Layne-Farrar, Anne and Lerner, Josh. “To Join or Not to Join: Examining Patent 

Pool Participation and Rent Sharing Rules” (January 7, 2008). Available at 

SSRN: http://ssrn.com/abstract=945189 

Lerner, Josh, Marcin Strojwas and Jean Tirole. “The Design of Patent Pools: The 

Determinants of Licensing Rules.” RAND Journal of Economics, 2007, 38(3), pp. 

610-625. 

Lerner, Josh. “Patenting in the Shadow of Competitors.” Journal of Law & 

Economics, 1995, 38(2), pp. 463-95. 

Lerner, Josh, and Jean Tirole. “Efficient Patent Pools.” American Economic 

Review, 2004, 94(3), 691-711. 

Merges, Robert. “Institutions for Intellectual Property Transactions: The Case of 

Patent Pools.” University of California at Berkeley Working Paper, 1999. 

Moser, Petra. “Innovation without Patents.” Forthcoming, Journal of Law & 

Economics. 

Moser, Petra, and Alessandra Voena. “Compulsory Licensing: Evidence from the 

Trading-with-the-Enemy Act.” Forthcoming, American Economic Review. 

Popp, David, Ted Juhl and Daniel Johnson. “Time in Purgatory: Examining the 

Grant Lag for U.S. Patent Applications." Topics in Economic Analysis & Policy, 

2004, 4(1), Article 29. 

Shapiro, Carl. “Navigating the Patent Thicket: Cross Licenses, Patent Pools, and 

Standard Setting.” In Jaffe, Adam, Lerner, Josh, & Stern, Scott (Eds.), 

Innovation Policy and the Economy, Cambridge, MA: MIT Press, 2001. 

Vaughan, Floyd. The United States patent system: legal and economic conflicts in 

American patent history. Norman, OK: University of Oklahoma Press, 1956. 

25

Wooldridge, J.M. “Distribution-free estimation of some nonlinear panel data 

models.” Journal of Econometrics, 1999. 90, pp. 77-97. 

26

Industry 

Year 

Formed- 

Dissolved 

TABLE 1 - 20 PATENT POOLS FORMED BETWEEN 1930 AND 1938 

Member 

Firms at 

Formation 

Member 

Firms at 

Dissolution 

Patents at 

Formation 

Grantback 

Rules 

Patents at 

Dissolution 

Licensees 

Countries 

High Tension Cables 1930-48 2 7 73 Yes 294 0 U.S. It., Switz. 

Water Conditioning 1930-51 2 4 4 Yes 130 0 U.S., U.K., Fr., Ger. 

Fuel Injection 1931-42 4 4 22 Yes 171 0 U.S., Ger., U.K., Fr. 

Pharmaceuticals 1932-45 2 2 5 Yes 110 0 U.S., Ger. 

Railroad Springs 1932-47 2 3 6 Yes 13 9 U.S. 

Textile Machines 1932-50 2 2 39 - 218 0 U.S. 

Hydraulic Oil Pumps 1933-52 2 2 3 Yes 44 0 U.S. 

Machine Tools 1933-55 5 5 3 Yes 9 0 U.S. 

Phillips Screws 1933-49 2 2 2 Yes 26 28 U.S. 

Color Cinematography 1934-50 2 2 59 Yes 162 0 U.S. 

Dry Ice 1934-52 3 3 36 Yes 58 0 U.S. 

Electric Generators 1934-53 2 2 30 Yes 222 0 U.S., Ger. 

Lecithin 1934-47 5 5 29 Yes 54 1 U.S., Ger., Den. 

Variable Condensers 1934-53 3 3 60 Yes 74 3 U.S. 

Aircraft Instruments 1935-46 3 16 91 Yes 272 0 U.S., Ger., U.K., It., Fr., Sw. 

Stamped Metal Wheels 1937-55 3 3 90 - 189 11 U.S. 

Wrinkle Paint Finishes 1937-55 2 2 20 - 77 200 U.S. 

Fuse Cutouts 1938-48 2 2 2 - 2 10 U.S. 

Ophthalmic Frames 1938-48 2 2 21 - 22 14 U.S. 

Furniture Slip Covers 1938-49 2 2 2 - 2 2 U.S. 

Notes: Grant-back rules require member firms to offer all new patents for licensing to the pool. Den. = Denmark; Fr. = France; Ger. = Germany; Sw. = 

Switzerland; U.K. = United Kingdom; U.S. = United States. Data from license agreements, written complaints, and court opinions from regional depositories of 

the National Archives in Chicago (railroad springs, machine tools, Phillips screws, lecithin, stamped metal wheels, wrinkle finishes, and fuse cutouts), Kansas 

City (ophthalmic frames), New York City (high tension cables, water conditioning, fuel injection, pharmaceuticals, textile machinery, dry ice, electric equipment, 

variable condensers, aircraft instruments), and Riverside (color film). 

1

Technology 

High Tension Cables 

Water Conditioning 

Apparatus 

Fuel Injection Equipment 

Pharmaceuticals 

Railroad Springs 

Textile Machines 

Hydraulic Oil Pumps 

Machine Tools 

Phillips Screws 

Color Cinematography 

Dry Ice 

Electric Generators 

Lecithin 

Variable Condensers 

Aircraft Instruments 

Stamped Metal Wheels 

Wrinkle Paint Finishes 

Fuse Cutouts 

Ophthalmic Frames 

Furniture Slip Covers 

TABLE 2 – POOL TECHNOLOGIES AND THEIR USE 

Description and use 

Fluid-filled cable consisting of a conductor separated and insulated from an outer sheath by oil or gas under mechanical pressure; 

used by railroads and public utility companies for transmitting electrical power at high voltages. 

Natural and synthetic chemicals and necessary machinery to purify water, to eliminate or counteract certain undesirable chemicals, 

substances or characteristics thereof, or otherwise render it suitable for household and industrial uses. 

Any and all devices for the feed distribution and injection of fuel in connection with internal combustion engines, including fittings 

and accessories for aircraft and other engines. 

Chemicals and pharmaceuticals for medicinal household and industrial purposes including synthetic vitamins, narcotics, and 

photographic chemicals. 

Railroad springs, spring plates, Universal plates, and Coil-Elliptic devices used both in the maintenance and repair of railway cars 

and locomotives and in the construction of new railway cars and locomotives. 

Multi-section flat bed machines, replacement parts and equipment designed to knit full-fashioned hosiery. 

Hydraulic oil pump for pumping oil from wells. 

Power-driven machines, not portable by hand, used to cut or shape metal and includes machine tools of the following types: lathes, 

drilling machines, boring machines, milling machines, grinding machines, and screw machines. 

Processes and equipment used to produce cross-recessed head screws where the slots cross in the head of the screw are rounded and 

the bottom of the recess is rounded; used in assembly or production line operations. 

Negative film and devices for the purpose of photographing motion picture productions in color. 

Solid carbon dioxide used as a refrigerant, to freeze and preserve foods and other products in transportation and storage, in airplane 

and bridge construction to shrink metal parts, and in the manufacture of various chemicals. 

Electric generators, transformers, motors, and appliances. 

Lecithin is a natural organic substance found in many animal and vegetable products such as egg yolks, soy beans, and corn. 

Lecithin in used extensively in the food field in lard, oleomargarine, shortening, chocolates, and bakery products, and is also 

utilized in such other fields as textiles, paints, wood preservatives, leather dressing, and gasoline. 

Variable condensers are tuning devices used in radios to select broadcasting stations. 

Various aircraft instruments and parts such as altitude meters, carburetors, devices for removing and preventing the formation of ice 

on aircraft, and aero photographic devices. 

Metals wheels characterized by having a wheel body formed by a metal stamping, as distinguished from a wheel body formed 

entirely from a casting; used in automobiles, buses, trucks. 

Enamel, varnish and paint, which has been compounded from materials and methods to produce, when applied and dried, a hard 

wrinkled surface on metal or other materials. 

Used in preventing short circuits or overloads. 

Lenses and frames used in eye glasses and spectacles. 

Ready-made slip covers for upholstered chairs and sofas. 

Notes: Descriptions from Written Complaints and Final Judgments which are available in regional depositories of the National Archives at Chicago, Kansas City, New York City, 

and Riverside. Also see Vaughan (1956). 

2

TABLE 3: MEAN PATENT APPLICATIONS PER SUBCLASS AND YEAR 

Pre pool Post pool All years 

(1921-1948) 

Pool subclasses (n=371) 2.689 2.551 2.621 

Cross-reference subclasses (n=534) 2.919 3.169 3.043 

Other subclasses (n=30,986) 1.024 1.152 1.088 

Pool subclasses with 1 pool patent 2.350 2.401 2.375 

Pool subclasses with 2 pool patents 2.917 3.009 2.962 

Pool subclasses with 3+ pool patents 4.573 3.054 3.805 

10-year intervals before and after the 

creation of a pool 

10 years 

Pre-pool 

10 years 

Post-pool 

10 years pre 

and post 

Pool subclasses (n=371) 2.993 2.656 2.824 

Cross-reference subclasses (n=534) 3.195 3.298 3.246 

Other subclasses (n=30,986) 1.086 1.145 1.116 

Pool subclasses with 1 pool patent 2.595 2.474 2.535 

Pool subclasses with 2 pool patents 3.237 3.168 3.202 

Pool subclasses with 3+ pool patents 5.138 3.270 4.204 

Notes: Pool subclasses are subclasses that include at least one pool patent. Cross-reference 

subclasses were listed as secondary (cross-reference) subclasses by examiners for at least one 

pool patent. Other subclasses are all subclasses in the same main class that do not include a 

pool patent and are not listed as a cross-references subclass for a pool patent. To define unique 

ten-year pre- and post-pool periods for control subclasses, we exclude 14,931 subclasses that are 

part of the same main class as pool patents from multiple pools. 

3

TABLE 4: OLS – DEPENDENT VARIABLE IS PATENTS PER SUBCLASS AND YEAR, 1921-1948 

(1) (2) (3) (4) (5) 

Pool*pool patents -0.338** -0.451** -0.412** 

(0.098) (0.120) (0.118) 

Pool*pool patents*years 1-5 -0.328** 

(0.099) 


(0.148) 


(0.151) 

Pool*pool cross-reference patents -0.102 -0.101 

(0.086) (0.087) 

Pool*pool subclass -0.555** 

(0.156) 

Pool*cross-reference subclass 0.101 

(0.109) 

Constant 0.947** 0.947** 0.947** 0.947** 0.947** 

(0.008) (0.008) (0.008) (0.008) (0.008) 

Subclass fixed effects Yes Yes Yes Yes Yes 

Year fixed effects Yes Yes Yes Yes Yes 

Linear and quadratic trends - Yes Yes Yes Yes 

Standard errors clustered at the subclass level; ** significant at 1 percent, * significant at 5 percent. 

N (# of subclasses * 28 years) 1,285,676 1,285,676 1,285,676 1,285,676 1,285,676 

R-squared 0.526 0.526 0.526 0.526 0.526 

Notes: Data include 45,917 subclasses in 103 main classes that include at least one pool patent. The timing of 

invention is measured by the year of the patent application. The variable pool equals 1 for years after the pool 

forms. Pool patents counts patents that were included in the initial pooling agreement and list subclass c as 

primary (original) subclass. Cross-reference patents counts patents that list subclass c as a secondary (crossreference) 

subclass. Pool subclass equals 1 for 371 subclasses that include at least one pool patent; cross-reference 

subclass equals 1 for 534 subclasses that include at least one cross-reference patent but did not include any original 

patents. 

4

TABLE 5: VARIATION IN THE NUMBER OF POOL PATENTS – 

DEPENDENT VARIABLE IS PATENTS PER SUBCLASS AND YEAR 

All Patents 

Pool 

Subclasses 

Only 

Cited 

Patents 

Only 

Fixedeffects 

Poisson 

(1) (2) (3) (4) (5) 

Pool*1 pool patent -0.145 -0.357* -0.080 -0.132 -0.086 

(0.131) (0.150) (0.1598) (0.109) (0.053) 

Pool*2 pool patents -0.074 -0.273 0.085 -0.014 -0.035 

(0.479) (0.489) (0.497) (0.342) (0.165) 

Pool*3+ pool patents -1.786** -2.015** -1.361* -1.054** -0.424** 

(0.583) (0.577) (0.539) (0.330) (0.132) 

Pool*pool cross-reference 

patents 

-0.219 0.110 -0.042* 

(0.112) (0.059) (0.019) 

Constant 0.947** 0.947** 2.003** 0.467** 

(0.008) (0.008) (0.091) (0.005) 





N (# of subclasses * 28 years) 1,285,676 1,285,676 25,340 1,285,676 1,285,676 

R-squared 0.526 0.526 0.529 0.495 





subclass. Pool subclass equals 1 for 371 subclasses that include at least one pool patent; crossreference 

subclass equals 1 for 534 subclasses that include at least one cross-reference patent. Cited patents 

restricts the data set to 298,503 of 472,303 patents that are cited by at least one U.S. patent between 1920 and 

2002. 

5

TABLE 6: OLS 

RESTRICTING THE SAMPLE TO SUBCLASSES THAT INCLUDE AT LEAST ONE POOL PATENT 


(1) (2) (3) (4) (5) 


(0.106) (0.125) (0.121) 


(0.102) 


(0.151) 


(0.151) 

Pool*pool cross-reference patents -0.204 -0.198 

(0.109) (0.111) 

Pool*pool subclass -0.265 

(0.159) 

Pool*cross-reference subclass 0.079 

(0.122) 

Constant 2.003** 2.003** 2.003** 2.003** 2.003** 

(0.090) (0.090) (0.090) (0.090) (0.089) 





N (# of subclasses * 28 years) 25,340 25,340 25,340 25,340 25,340 

R-squared 0.528 0.528 0.529 0.530 0.525 


invention is measured by the year of the patent application. The variable pool equals 1 for years after the pool forms. 

Pool patents counts patents that were included in the initial pooling agreement and list subclass c as primary 

(original) subclass. Cross-reference patents counts patents that list subclass c as a secondary (cross-reference) 

subclass. Pool subclass equals 1 for 371 subclasses that include at least one pool patent; cross-reference subclass 

equals 1 for 534 subclasses that include at least one cross-reference patent but did not include any original patents. 

6

TABLE 7: OLS RESTRICTING THE SAMPLE TO CITED PATENTS – 


(1) (2) (3) (4) (5) 

Pool*pool patents -0.058 -0.167** -0.210** 

(0.047) (0.051) (0.052) 


(0.048) 


(0.073) 


(0.079) 

Pool*pool cross-reference patents 0.114 0.115 

(0.060) (0.060) 

Pool*pool subclass -0.157 

(0.112) 

Pool*cross-reference subclass 0.475** 

(0.084) 

Constant 0.457** 0.457** 0.457** 0.457** 0.457** 

(0.005) (0.005) (0.005) (0.005) (0.005) 






R-squared 0.497 0.497 0.497 0.497 0.497 

Notes: Sample restricts the data set to 298,503 of 472,303 patents that are cited by at least one U.S. patent between 1920 

and 2002. Data include 905 subclasses in 103 main classes that include at least one pool patent as a primary (original) or 

secondary (cross-reference) subclass. The timing of invention is measured by the year of the patent application. The 

variable pool equals 1 for years after the pool forms. Pool patents counts patents that were included in the initial pooling 

agreement and list subclass c as primary (original) subclass. Cross-reference patents counts patents that list subclass c as a 

secondary (cross-reference) subclass. Pool subclass equals 1 for 371 subclasses that include at least one pool patent; crossreference 

subclass equals 1 for 534 subclasses that include at least one cross-reference patent but did not include any 

original patents. 

7

TABLE 8: FIXED-EFFECTS POISSON – 


(1) (2) (3) (4) (5) 


(0.017) (0.018) (0.020) 


(0.021) 


(0.025) 


(0.028) 

Pool*pool cross-reference patents -0.040* -0.041* 

(0.019) (0.019) 

Pool*pool subclass -0.192** 

(0.046) 

Pool*cross-reference subclass -0.042 

(0.035) 






Log-likelihood -1414941.3 -1414941.3 -1414682.6 -1414672.3 -1414837.6 

Notes: Data include 45,917 subclasses in 103 main classes that include at least one pool patent. The timing of invention is 

measured by the year of the patent application. The variable pool equals 1 for years after the pool forms. Pool patents 

counts patents that were included in the initial pooling agreement and list subclass c as primary (original) subclass. 

Cross-reference patents counts patents that list subclass c as a secondary (cross-reference) subclass. Pool subclass equals 

1 for 371 subclasses that include at least one pool patent; cross-reference subclass equals 1 for 534 subclasses that include 

at least one cross-reference patent but did not include any original patents. Robust standard errors calculated using Tim 

Simcoe’s “xtpqml” command based on Wooldridge (1999). 

8

Pool*pool patents 

TABLE 9: EXCLUDING INDIVIDUAL POOLS. 

OLS– DEPENDENT VARIABLE IS PATENTS PER SUBCLASS AND YEAR 

Water Fuel 

Railroad Textile Oil 

Cables 

Pharma. 

Condi. Injection 

Springs Machines Pumps 

-0.501** -0.450** -0.459** -0.448** -0.442** -0.484** -0.450** 

(0.136) (0.121) (0.126) (0.121) (0.121) (0.122) (0.120) 

Constant 0.937** 0.947** 0.935** 0.970** 0.939** 0.940** 0.947** 

(0.008) (0.008) (0.008) (0.008) (0.008) (0.008) (0.008) 

Subclasses*years 1,208,592 1,285,676 1,219,092 1,250,060 1,263,752 1,2497,24 1,285,676 

R-squared 0.53 0.53 0.53 0.53 0.53 0.53 0.53 

Machine 

Tools 

Phillips 

Screws 

Color 

Cinema. 

Dry Ice 

Electric 

Gen. 

Lecithin 

Variable 

Cond. 

Pool*pool patents -0.450** -0.450** -0.469** -0.430** -0.442** -0.456** -0.418** 

(0.120) (0.120) (0.124) (0.128) (0.122) (0.121) (0.142) 

Constant 0.948** 0.937** 0.976** 0.954** 0.935** 0.974** 0.939** 

(0.008) (0.008) (0.008) (0.008) (0.007) (0.008) (0.008) 

Subclasses*years 1,275,904 1,253,924 1,179,612 1,252,832 1,250,200 1,226,736 1,239,952 

R-squared 0.53 0.53 0.53 0.53 0.52 0.53 0.53 

Aircraft 

Instr. 

Metal 

Wheels 

Wrinkle 

Finishes 

Fuse 

Cutouts 

Ophth. 

Frames 

Slip 

Covers 

Pool*pool patents -0.384** -0.454** -0.454** -0.451** -0.461** -0.451** 

(0.095) (0.136) (0.124) (0.120) (0.122) (0.120) 

Constant 0.930** 0.921** 0.967** 0.949** 0.940** 0.952** 

(0.008) (0.008) (0.008) (0.008) (0.008) (0.008) 

Subclasses*years 1,142,820 1,201,256 1,252,244 1,274,028 1,262,632 1,265,852 

R-squared 0.52 0.52 0.53 0.53 0.53 0.53 

Notes: Estimates include year, subclass fixed effects and quadratic trends. Invention is measured at the time 

of the patent application. Pool patents counts the number of patents that were included in the initial pooling 

agreement and list subclass c as an original subclass. 

9

TABLE 10: VARIATION IN LICENSING 


All Patents 

Pool 

Subclasses 

Only 

Cited 

Patents 

Only 

Fixedeffects 

Poisson 

(1) (2) (3) (4) (5) 

Pool*pool patents -0.248 -0.395* -0.366* -0.096 -0.068** 

(0.155) (0.175) (0.183) (0.072) (0.015) 

Pool*pool patents*1-5 licensees -0.222 -0.162 -0.165 -0.143 -0.124** 

(0.234) (0.226) (0.230) (0.084) (0.036) 

Pool*pool patents*>5 licensees -0.174 -0.069 -0.072 -0.137 -0.094 

(0.236) (0.231) (0.235) (0.125) (0.068) 

Constant 0.947** 0.947** 2.003** 0.457** 

(0.008) (0.008) (0.090) (0.005) 





N (# of subclasses * 28 years) 1,285,676 1,285,676 25,340 1,285,676 1,285,676 

R-squared 0.526 0.526 0.529 0.497 






subclass equals 1 for 534 subclasses that include at least one cross-reference patent. Column (3) 

restricts the data set to subclasses that are listed either as primary or secondary (cross-reference) subclass for 

patents that were included in the initial pool agreement. Cited patents restricts the data set to 298,503 of 

472,303 patents that are cited by at least one U.S. patent between 1920 and 2002. 

10

TABLE 11: GRANT-BACKS 


All patents 

Pool 

Subclasses 

Only 

Cited 

Patents 

Only 

Fixedeffects 

Poisson 

(1) (2) (3) (4) 

Pool*pool patents -0.303* -0.371* -0.343* -0.176 -0.109* 

(0.151) (0.163) (0.163) (0.101) (0.052) 

Pool*pool patents*grant-backs -0.051 -0.118 -0.121 0.012 0.014 

(0.195) (0.189) (0.191) (0.105) (0.053) 

Constant 0.947** 0.947** 2.003** 0.457** 

(0.008) (0.008) (0.090) (0.005) 





Observations 1,285,676 1,285,676 25,340 1,285,676 1,285,676 

R-squared 0.526 0.526 0.529 0.497 








patents that were included in the initial pool agreement. Cited patents restricts the data set to 298,503 of 472,303 

patents that are cited by at least one U.S. patent between 1920 and 2002. 

11

TABLE 12: GEOGRAPHIC SCOPE 


All Patents 

Pool 

Subclasses 

Only 

Cited 

Patents 

Only 

Fixedeffects 

Poisson 

(1) (2) (3) (4) 

Pool*pool patents -0.389** -0.478** -0.449** -0.231** -0.152** 

(0.100) (0.120) (0.123) (0.063) (0.034) 

Pool*pool patents*international 0.132 0.074 0.068 0.174 0.088* 

(0.232) (0.215) (0.218) (0.103) (0.037) 

Constant 0.947** 0.947** 2.003** 0.457** 

(0.008) (0.008) (0.090) (0.005) 





Observations 1285676 1285676 25340 1,285,676 

R-squared 0.526 0.526 0.528 0.497 








patents that were included in the initial pool agreement. Cited patents restricts the data set to 298,503 of 472,303 

patents that are cited by at least one U.S. patent between 1920 and 2002. 

12

TABLE 13 - ANTITRUST VIOLATIONS 

Industry Anticompetitive Practices Remedies Decision 

High Tension Cables Price-fixing; Denied licenses to Restrictive agreements cancelled; United States v. General Cable Corp., CCH 1948-49 

competitors; Divided world markets Compulsory RAND licensing Trade Cases 62,300 [S.D.N.Y. Civil No. 40-76; 

Water Conditioning 

Apparatus 

Fuel Injection 

Equipment 

Denied licenses to competitors; 

Divided world markets 


Divided world markets; 

Restrictive agreements cancelled; 

Compulsory RAND and royalty-free 

licensing 


Compulsory RAND licensing 

Pharmaceuticals Price-fixing; Divided world markets Restrictive agreements cancelled; 

Compulsory royalty-free licensing 

Railroad Springs 

Textile Machines for 

Hosiery 

Hydraulic Oil Pumps 

Machine Tools 

Phillips Screws 

Color Cinematography 

Dry Ice 

Price-fixing; Allocated customers to 

manufacturers through bid-rigging 

Denied sales of machinery to 

competitors of pool members; 

Destroyed competing machinery 

Price-fixing; Denied licenses to 

competitors 

Allocated specific fields to pool 

members; Denied licenses to 

competitors 

Price-fixing; Prevented licensees 

from producing competing screws 

Allocating color film production to 

Technicolor only 

Price-fixing; Allocated territories; 


Conducted price wars against 

competitors 



licensing 


licensing 

Triple damages awarded to a 

competitor, and alleged infringer 

None: pool dissolved by pool 

members due to internal litigation 

over the terms of their agreement 





licensing 

Restrictive practices enjoined; 


Complaint, 1947; Consent Judgment, 1948]. 

United States v. The Permutit Company and W. 

Spencer Robertson, CCH 1950-51 Trade Cases 

62,888 [S.D.N.Y. Civil No. 32-394; Complaint, 

1945; Consent Judgment, 1951]. 

United States v. American Bosch Corp., CCH 1948-49 

Trade Cases 62,284 [S.D.N.Y. Civil No. 20-164; 

Complaint and Consent Decree, Dec. 29, 1942]. 

United States v. Merck and Co., CCH 1944-45 Trade 

Cases 57,416 [D.C.N.J. Civil No. 3159; Complaint, 

1943; Consent Decree, 1945]. 

United States v. American Locomotive Co., CCH 

1945-47 Trade Cases 57,621 [N.D. Ind. Civil No. 

545; Complaint, 1945; Consent Judgment, 1947]. 

United States v. Textile Machine Works, CCH 1950- 

51 Trade Cases 62,709 [S.D.N.Y. Civil No. 43-671; 

Complaint, 1947; Final; Judgment, 1950]. 

Kobe, Inc. v. Dempsey Pump Co., 198 F.2d 416 [10th 

Cir. 1952]; United States v. Kobe [N.D. Okla. Civil 

No. 2865; Complaint, 1951]; also Civ. No. 2350. 

United States v. Associated Patents, 134 F. Supp. 74 

[E.D. Mich., 1955]. 

United States v. Phillips Screw Co., CCH 1949 Trade 

Cases 62,394 [N.D. Ill.] 

United States v. Technicolor, Inc., CCH 1950-51 

Trade Cases 2,586 [S.D. Calif. Civil No. 7507-M; 

Complaint, 1947; Consent Judgments, 1948 and 

1950]. 

United States v. The Liquid Carbonic Corp., CCH 

Trade Cases 67,248 [E.D.N.Y. Civil No. 9179; 

Complaint, 1948; Final Judgment, 1952]. 

13

Electric Generators Price-fixing; Divided world markets Restrictive agreements cancelled; 

Compulsory royalty-free licensing 

Lecithin 

Variable Condensers 

[Radio Tuning 

Devices] 

Allocated domestic market shares; 

Divided world markets; Threatened 

competitors with litigation 


competitors 



licensing 

Dissolution of pool; Compulsory 

royalty-free licensing 

Aircraft Instruments Divided world markets Restrictive agreements cancelled; 


licensing 

Stamped Metal Wheels Price-fixing; Allocating distributors Restrictive practices enjoined; 

to manufacturers 


Wrinkle Paint Finishes Price-fixing Restrictive agreements cancelled; 


Fuse Cutouts Price-fixing Restrictive contracts cancelled; 

Ophthalmic Frames 

Furniture Slip Covers 

Price-fixing; Restricting the sale of 

frames to certain wholesalers 


competitors unless forced to 




licensing 

None: agreements dissolved prior to 

suit due to disagreement among pool 

members 

United States v. Westinghouse Electric Mfg. Co., 

CCH Current Trade Cases 67,501 [D.C.N.J. Civil 

No. 5152; Complaint, 1945; Consent Judgment, 

1953]. 

United States v. American Lecithin Co., CCH 1946-47 

Trade Cases 57,542 [N.D. Ohio Civil No. 24115; 

Complaint, 1946; Consent Judgment, 1947]. 

United States v. General Instrument Corp., 87 F. 

Supp. 157, 194 [D.N.J. 1949]; United States v. 

General Instrument Corp., 115 F. Supp. 582 [D.N.J. 

1953]. 

United States v. Bendix Aviation Corporation, CCH 

1946-47 Trade Cases 57,444 [D.C.N.J. Civil No. 

2531; Complaint, 1942, Consent Decree, 1946]. 

United States v. Kelsey-Hayes Wheel Co. [E.D.Mich. 

Civil No. 10-655; Complaint, 1951]. 

United States v. New Wrinkle, Inc., 1955 Trade Cases 

[C.C.H.] 68,203 [S.D. Ohio]. 

United States v. Line Material Co., 333 U.S. 287, 305 

[1948]. 

United States v. American Optical Co., CCH 1948-49 

Trade Cases 62,308 [S.D.N.Y. Civil No. 10-391; 

Complaint, 1940; Final Consent Judgment, 1948]. 

United States v. Krasnov, 143 F. Supp. 184 [E.D. 

Penn., 1956]. 

Notes: Data from license agreements, written complaints, and court opinions were collected from regional depositories of the National Archives in Chicago 

[railroad springs, machine tools, Phillips screws, lecithin, stamped metal wheels, wrinkle finishes, and fuse cutouts], Kansas City [ophthalmic frames], New York 

City [high tension cables, water conditioning apparatus, fuel injection equipment, pharmaceuticals, textile machinery, dry ice, electric equipment, variable 

condensers, aircraft instruments], and Riverside [color film]. Additional information on pool patents, member firms and licensees from LexisNexis. RAND refers 

to reasonable and non-discriminatory licensing. 

14

FIGURE 1 – PATENT APPLICATIONS VERSUS GRANTS PER YEAR, 1919-1950 

60000 

50000 

40000 

30000 

20000 

10000 

0 

1919 1924 1929 1934 1939 1944 1949 

Patents Granted 

Patents Filed 

Notes: Grant year data from USPTO. Information on filing years was collected through a search of the full 

text of patent grants 1920-75, available at www.google.com/patents. Our sample period is 1921 to 1948; 

filing year data before 1921 is subject to truncation. 

FIGURE 2 – POOL AND CROSS-REFERENCE SUBCLASSES BY NUMBER OF POOL PATENTS 

500 

450 

Number of subclasses with x pool patents 

400 

350 

300 

250 

200 

150 

100 

50 

0 

1 2 3 4 5 6 7 8 9 10 11 12 13 

Number of pool patents 

Pool Subclasses 

Cross-Refernce Subclasses 

Notes: Notes: Data include 45,917 subclasses in 103 main classes that include at least pool patent. The 

timing of invention is measured by the year of the patent application; t=0 denotes the year when the pool 

formed. Pool subclasses are listed as the primary subclass by at least one pool patent; pool patents are 

patents that were included in the initial pool agreement. Cross-reference subclasses are listed as the 

secondary, cross-reference subclass for at least one pool patent and not listed as a primary subclass. 

1

4 

FIGURE 3 – AVERAGE PATENTS BY SUBCLASS AND YEAR 

Pool Start Year 

3.5 

3 

Average Patents Per Year 

2.5 

2 

1.5 

1 

0.5 

-9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 

Pool Subclass Cross-ref Subclass Other Subclass 

Notes: Data include 45,917 subclasses in 103 main classes that include at least pool patent. The timing of 

invention is measured by the year of the patent application; t=0 denotes the year when the pool formed. 

Pool subclasses are listed as the primary subclass by at least one pool patent; pool patents are patents that 

were included in the initial pool agreement. Cross-reference subclasses are listed as the secondary, crossreference 

subclass for at least one pool patent and not listed as a primary subclass. 

7 

FIGURE 4 – AVERAGE PATENTS BY SUBCLASS AND YEAR FOR POOL 

SUBCLASSES WITH DIFFERENT NUMBERS OF POOL PATENTS 


6 

5 

4 

3 

2 

1 

0 

-9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 

1 Patent 2 Patents 3+ Patents 

Notes: To measure pooling at the level of subclasses, this figure distinguishes pool subclasses with 1, 2, 

and 3 pool patents. Data include 45,917 subclasses in 103 main classes that include at least pool patent. 

The timing of invention is measured by the year of the patent application; t=0 denotes the year when the 

pool formed. Pool subclasses are listed as the primary subclass on at least one patent that was included in 

the initial agreement of a pool. 

2

FIGURE 5 – ANNUAL COEFFICIENTS FOR POOL SUBCLASSES INCLUDING A PRE-EFFECT 

0.8 


0.6 

Coefficient estimates 1 for Pool * Pool Subclass 

0.4 

0.2 

0 

-0.2 

-0.4 

-0.6 

-9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 

-0.8 

Notes: Coefficient estimates for k in the regression Patents ct = + k * Pool Subclass c + f c + t + ct 

where k =-17, ….17, 18, counts years before and after a pool forms. Data include 45,917 subclasses in 103 

main classes that include at least pool patent. The timing of invention is measured by the year of the patent 

application; t=0 denotes the year when the pool formed. Pool subclasses are listed as the primary subclass 

by at least one pool patent; pool patents are patents that were included in the initial pool agreement. 

3 

FIGURE 6 – AVERAGE CITED PATENTS BY SUBCLASS AND YEAR 


2.5 

2 

1.5 

1 

0.5 

0 

-9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 

Pool Subclass Cross-Reference Subclass Other Subclass 

Notes: Data include 45,917 subclasses in 103 main classes that include at least pool patent. The timing of 

invention is measured by the year of the patent application; t=0 denotes the year when the pool formed. 

Pool subclasses are listed as the primary subclass by at least one pool patent; pool patents are patents that 

were included in the initial pool agreement. Cross-reference subclasses are listed as the secondary, crossreference 

subclass for at least one pool patent and not listed as a primary subclass. 

3

FIGURE 7 – POOL SUBCLASS AND POOL MEMBER PATENTS 

200 


35 

16 


2.5 

180 

30 

14 

160 

140 

25 

12 

2 

Industry Patents 

120 

100 

80 

20 

15 

Pool Patents 


10 

8 

6 

1.5 

1 

Pool Patents 

60 

40 

10 

4 

0.5 

20 

5 

2 

0 

0 

0 

0 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

80 

Industry Patents Pool Patents 


High Tension Cables (1930-48) Water Conditioning (1930-51) 


16 14 


2.5 

70 

14 

12 

2 

60 

12 

10 


50 

40 

30 

10 

8 

6 

Pool Patents 


8 

6 

1.5 

1 

Pool Patents 

20 

4 

4 

0.5 

10 

2 

2 

0 

0 

0 

0 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

70 



Fuel Injection (1931-42) Pharmaceuticals (1932-45) 

4.5 

140 



25 

60 

4 

120 

3.5 

20 

50 

3 

100 


40 

30 

2.5 

2 

Pool Patents 


80 

60 

15 

10 

Pool Patents 

1.5 

20 

40 

1 

5 

10 

0.5 

20 

0 

0 

0 

0 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 


16 

14 

12 

10 

8 

6 

4 

2 



Railroad Springs (1932-47) Textile Machines (1932-50) 

3.5 


3 

2.5 

2 

1.5 

1 

0.5 

Pool Patents 


9 


8 

7 

6 

5 

4 

3 

2 

1 

2.5 

2 

1.5 

1 

0.5 

Pool Patents 

0 

0 

0 

0 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 



Hydraulic Oil Pumps (1933-52) Machine Tools (1933-52) 

4

16 


3.5 

140 


18 

14 

3 

120 

16 


12 

10 

8 

6 

4 

2.5 

2 

1.5 

1 

Pool Patents 

100 

80 

60 

40 

14 

12 

10 

8 

6 

4 

Pool Patents 

2 

0.5 

20 

2 

0 

0 

0 

0 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

140 



Phillips Screws (1933-49) Color Cinematography (1934-50) 

14 

160 



14 

120 

12 

140 

12 

100 

10 

120 

10 


80 

60 

8 

6 

Pool Patents 


100 

80 

60 

8 

6 

Pool Patents 

40 

4 

40 

4 

20 

2 

20 

2 

0 

0 

0 

0 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

90 



Dry Ice (1934-52) Electric Generators (1934-53) 

9 

160 



14 

80 

8 

140 

12 


70 

60 

50 

40 

30 

7 

6 

5 

4 

3 

Pool Patents 


120 

100 

80 

60 

10 

8 

6 

Pool Patents 

20 

2 

40 

4 

10 

1 

20 

2 

0 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

0 

0 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

0 

350 



Lecithin (1934-47) Variable Condensers (1934-53) 

25 

250 



30 

300 

20 

200 

25 

250 

20 


200 

150 

15 

10 

Pool Patents 


150 

100 

15 

Pool Patents 

10 

100 

50 

5 

50 

5 

0 

0 

0 

0 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 



Aircraft Instruments (1935-46) Stamped Metal Wheels (1937-55) 

5

90 


10 

9 


2.5 

80 

9 

8 

70 

8 

7 

2 


60 

50 

40 

7 

6 

5 

4 

Pool Patents 


6 

5 

4 

1.5 

1 

Pool Patents 

30 

3 

3 

20 

2 

2 

0.5 

10 

1 

1 

0 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

0 

0 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

0 

40 



Wrinkle Paint Finishes (1937-55) Fuse Cutouts (1938-48) 


4.5 

9 


1.2 

35 

4 

8 

1 

30 

3.5 

7 


25 

20 

3 

2.5 

2 

Pool Patents 


6 

5 

4 

0.8 

0.6 

Pool Patents 

15 

1.5 

3 

0.4 

10 

1 

2 

5 

0.5 

1 

0.2 

0 

0 

0 

0 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 

1921 1923 1925 1927 1929 1931 1933 1935 1937 1939 1941 1943 1945 1947 


Pool Patents 


Pool Patents 

Ophthalmic Frames (1938-48) Furniture Slip Covers (1938-49) 

Notes: Pool subclasses are listed as the primary (original) subclass by at least one pool patent before the 

formation of a pool. Industry patents (unbroken black line) includes all patents issued in those pool 

subclasses. Pool patents (broken black line) includes patents issued to the pool in those pool subclasses. 

The timing of invention is measured by the year of the patent application. 

6

DO PATENT POOLS ENCOURAGE INNOVATION? EVIDENCE ...

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