again, little demonstrable value from technology spillover. Chorum’s core business is inoptical filters, optical switches, optical signal processors, <strong>and</strong> related electro-opticalcomponents for telecommunication networks. Their six citations were to Displaytech’s patenton an electro-optical polarizing switch. When interviewed, Chorum said they hadexperimented with FLCs to perform fast optical routing <strong>and</strong> switching, but had not pursuedthe idea past the early lab bench phase. None <strong>of</strong> their current products utilizes theDisplaytech ideas, <strong>and</strong> they have no plans to pursue them further. Since Chorum <strong>and</strong>Displaytech are in different lines <strong>of</strong> business, Chorum saw no competitive impact either.InViso Corp. <strong>of</strong> Sunnyvale, California (formerly Siliscape Corp. <strong>of</strong> Palo Alto, California) wasthe fifth U.S.-based organization most frequently citing Displaytech. It was formed in 1994<strong>and</strong> co-founded by Gregory Kintz, who got his MS in physics in 1985 from, again, theUniversity <strong>of</strong> Colorado. InViso was developing optics <strong>and</strong> electronic driver circuits forminiature image generators appropriate for use in head-mounted displays, goggles, <strong>and</strong> othernear-to-eye applications. These were complete systems, including compact magnificationoptics. InViso patents that cited Displaytech patents had to do with InViso’s novel techniquesfor reducing the size <strong>of</strong> the optical path <strong>and</strong> the magnification optics to display images likethose generated by microdisplays. However, InViso struggled with cash flow problems, neverachieved pr<strong>of</strong>itability, <strong>and</strong> folded in 2001. Three-Five Systems acquired InViso’s 40 patents,some equipment, <strong>and</strong> other assets for $780,000 in 2002, after writing <strong>of</strong>f an earlier $3.8million equity investment for a minority stake in InViso. 26 When Three-Five Systemssubsequently spun <strong>of</strong>f its microdisplay activities as Brillian Corporation in 2003, the divisionhad yet to be pr<strong>of</strong>itable.Thus, after interviews with technology management personnel at Three-Five Systems/Brillian,we estimate the value <strong>of</strong> knowledge spillovers to InViso from Displaytech’s patents orproducts to be on the order <strong>of</strong> tens <strong>of</strong> thous<strong>and</strong>s <strong>of</strong> dollars. This value is limited because <strong>of</strong>:1) InViso’s failure; 2) the limited total market value <strong>of</strong> InViso assets in the end, only a smallfraction <strong>of</strong> which were related specifically to Displaytech patents; 3) the continuedunpr<strong>of</strong>itability under Three-Five Systems/Brillian; <strong>and</strong> 4) the fact that Three-FiveSystems/Brillian makes (<strong>and</strong> had been supplying to InViso) its own alternative LCOSmicrodisplays that most likely would be used in any near-eye systems that Three-FiveSystems/Brillian might produce using the acquired InViso intellectual property.In summary, together with the Japanese firm Sharp, patents from these top six organizationsaccounted for nearly half the total citations to Displaytech patents. Despite this, we foundlittle evidence among these patent-citing organizations <strong>of</strong> significant economic value createdwithin the United States through the direct spillover <strong>of</strong> technical information either topotential competitors such as Three-Five Systems/InViso or to those in unrelated marketssuch as Chorum in telecommunications. Moreover, the citations from the top-citingorganization, Gemfire, were not indicative <strong>of</strong> any sharing or diffusion <strong>of</strong> technology at all.Three <strong>of</strong> the others, ColorLink, Lagerwall, <strong>and</strong> Chorum, all had existing personal social ties26. The Business Journal <strong>of</strong> Phoenix (2002) <strong>and</strong> Securities <strong>and</strong> Exchange Commission (SEC).40 DIRECT AND SPILLOVER EFFECTS OF <strong>ATP</strong>-FUNDED PHOTONICS TECHNOLOGIES
FIGURE 14.Geographic Distribution <strong>of</strong> Citations to Displaytech Patents21 Canada31(4)130(3)211 12110(7)6(3)2129(13)Japan15(8)Europe2 TaiwanU.S. Total: 90(30)Note: values indicate number <strong>of</strong> citations (number <strong>of</strong> citing organizations).with Displaytech through the University <strong>of</strong> Colorado. The social network centered on a starresearcher, Clark, who was the mechanism for technology flows, <strong>and</strong> our analysis shows theflows to those outside Displaytech have yet to create much economic spillover value. Ourconclusion is that patent citations are, at best, a very noisy indicator <strong>of</strong> technology spillover.One <strong>of</strong> the questions motivating our study relates to the social <strong>and</strong> geographic characteristics<strong>of</strong> technology diffusion mechanisms. Technology flows through geographically clusteredsocial ties are clearly very strong in the Displaytech case. Figure 14 shows a schematic <strong>of</strong> thisgeographic clustering among the citing patents by location (region or country) <strong>of</strong> the assignee.Silicon Valley, California, had the highest number, 31 citations by four groups, followed by theBoulder area <strong>and</strong> Japan. The U.S. total was 90 citations by 30 groups. The concentration inDisplaytech’s home state <strong>of</strong> Colorado is consistent with findings by Hicks (2002) that patentsby U.S. companies tend to be more likely to cite in-state public sector science.Yet, as an indicator <strong>of</strong> geographic clustering or social networks, this picture <strong>of</strong> patents wouldsend misleading signals. Without detailed case investigation, Gemfire in Silicon Valley, with24 citations, would look like a significant receiver <strong>of</strong> technological information, as wouldChorum in Texas <strong>and</strong> InViso in Silicon Valley. Yet Gemfire was not a receiver, <strong>and</strong> Chorum’slinks actually emerged when it was started in Boulder by researchers associated withDisplaytech 41