Patent litigations as a barrier to innovation : the case of eco-innovations in the LED sector

This poster is based on a paper concerned with innovation dynamics in the LED sector, which is one of the fastest growing technological domains today. In the most general sense, the paper is concerned with barriers to innovation in the LED sector. More specifically, our emphasis is placed on the current property rights regime that can act as a barrier to innovation in the industry. The reason that this may be so is evident in the dynamics of the LED industry today; a fast growing, complex and interdependent knowledge base, accompanied by a significant amount of patent lawsuits, where incumbent firms thrive to establish their proprietary standards to win the majority of the market. While such developments characterise the growth phase of many technologies, they can come at the expense of reducing variety and driving out small and creative enterprises that may not have the resources and market capabilities to participate in the innovation process, especially in terms of ecoinnovations. To explore these issues, we carry out a patent analysis in LEDs between 1980 and 2010, to reveal the extent to which patents subject to lawsuits are significantly different from the rest of LEDs patents. Our results indicate that in terms of their scientific basis, and of the extent to which later inventions draw upon them, litigated patents are significantly more valuable. This has two implications. First, as far as LEDs are concerned, lawsuits are driven by technological concerns rather than being solely a strategic or political tool used by incumbent firms. Second, because these patents can be the drivers of inventions in an increasing number of areas, caution is required at policy level to strike a fair balance between the protection of innovations on one hand, and maintaining variety which mainly comes from small and innovative firms on the other.