Intellectual Property Rights and Innovation: Evidence from the Human Genome

Abstract

Do intellectual property (IP) rights on existing technologies hinder subsequent innovation? Using newly-collected data on the sequencing of the human genome by the public Human Genome Project and the private rm Celera, this paper estimates the impact of Celera's gene-level IP on subsequent scienti c research and product development. Genes initially sequenced by Celera were held with IP for up to two years, but moved into the public domain once re-sequenced by the public e ort. Across a range of empirical speci cations, I nd evidence that Celera's IP led to reductions in subsequent scienti c research and product development on the order of 20 to 30 percent. Taken together, these results suggest that Celera's short-term IP had persistent negative e ects on subsequent innovation relative to a counterfactual of Celera genes having always been in the public domain.