The Effects of Strengthening Patent Rights on Firms Engaged in Cumulative Innovation: Insights from the Semiconductor Industry by

During the 1980s, changes in the US legal environment ushered in an era characterizedby strong patent rights. This paper examines the effects of this "pro-patent" shift onfirms in the semiconductor industry. By conducting interviews with industryrepresentatives and analyzing the patenting behavior of 95 US semiconductor firmsduring 1979-1995, we find that the strengthening of US patent rights spawned "patentportfolio races" among capital-intensive firms, but also may have facilitated entry ...