The Death of Distance has Been Greatly Exaggerated

The Death of Distance has Been Greatly Exaggerated

Despite the ability of the internet to connect virtually anyone anywhere, physical proximity still matters a great deal for innovation. Neighbors, coworkers, or fellow happy hour patrons are instrumental in the transmission of knowledge from which patentable inventions are born.

A new study from the Federal Reserve Bank of Philadelphia confirms the role of geographic proximity and knowledge spillovers in cases of identical claims of invention from patent filings:

We show evidence of localized knowledge spillovers using a new database of U.S. patent interferences terminated between 1998 and 2014. Interferences resulted when two or more independent parties submitted identical claims of invention nearly simultaneously. Following the idea that inventors of identical inventions share common knowledge inputs, interferences provide a new method for measuring knowledge spillovers. Interfering inventors are 1.4 to 4 times more likely to live in the same local area than matched control pairs of inventors. They are also more geographically concentrated than citation-linked inventors. Our results emphasize geographic distance as a barrier to tacit knowledge flows.

Two broad conclusions can be drawn from this study. First are the benefits of urbanization–the more people in similar industries interact, the more they are able to share knowledge, and subsequently use that knowledge to create new innovations.

Second, and more interesting, is how the knowledge that feeds patentable inventions is transmitted. The fact that two inventors (or teams of inventors) can yield the same (or a substantially similar) invention from the same base of knowledge indicates that, rather than advancing by leaps and bounds thanks to the genius of a few brilliant innovators, invention is a steady process of borrowing and sharing, often leading inventors to similar solutions to a given problem.

From a policy perspective, these findings indicate that more robust protections for simultaneous invention are needed. The cases studied involving identical claims of invention invented “nearly simultaneously,” making the upfront costs of innovation for the loser in a patent race for naught. To encourage innovation and accept the reality that in a patent race, winners may win by a hair, the granting of a patent to both inventors would be an improvement over current policy.

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By |2019-02-07T13:20:39-08:00February 7th, 2019|Blog, Intellectual Property|