The patent paradox revisited: an empirical study of patenting in the US semiconductor industry, 1979-1995

We examine the parenting behavior of firms in an industry characterized by rapid technological change and cumulative innovation. Recent survey evidenc e suggests that semiconductor firms do not rely heavily on patents to appro priate returns to R&D. Yet the propensity of semiconductor firms to parent has risen dramatically since the mid-1980s, We explore this apparent parado x by conducting interviews with industry representatives and analyzing the patenting behavior of 95 U.S, semiconductor firms during 1979-1995, The res ults suggest that the 1980s strengthening of U.S, parent rights spawned "pa tent portfolio races" among capital-intensive firms, but it also facilitate d entry by specialized design firms.