Innovation and the Firm: Vertical Integration in Patent-Intensive Industries – Seminar 9/8 at the University of Copenhagen

Looking forward to hear Professor Peter Lee’s (UC Davis) talk on “Innovation and the Firm: Vertical Integration in Patent-Intensive Industries” at the University of Copenhagen on Friday, Friday, September 8th 2017 from 10:00 – 12:00. If you are interested to join, please register here.

Abstract of Professor Lee’s talk:

Recent scholarship has highlighted the prevalence of vertical disintegration in high-technology industries, whereby distinct, specialized entities along a value chain transfer intellectual assets between them. Patents play an important role in vertical disintegration, for they lower the cost of technology transactions between upstream suppliers and downstream users.

This presentation, however, draws on empirical accounts to explore the peculiar persistence of vertical integration in patent-intensive fields. In biopharmaceuticals, agricultural biotechnology, and information technology, firms are increasingly acquiring technology providers rather than simply licensing their patents. This dynamic is even evident to a certain extent in university-industry technology transfer, where universities and commercializing firms frequently engage in institutional meshing to transfer patented technologies.

Professor Lee argues that the knowledge requirements of bundling together and exploiting complementary assets—particularly the need to obtain patent-related tacit knowledge—significantly drives firms to acquire entire companies rather than simply license their patents. Notwithstanding the existence of a patent, firms need the tacit, personal knowledge of the inventive entity to develop and commercialize a new technology. Relatedly, the desire to obtain not just a technological asset but innovative capacity, in the form of talented engineers and scientists, also motivates vertical integration. Finally, business imperatives favoring rapid scale and scope as well as internalization of profits also lead firms to acquire other companies rather than contract with independent suppliers and distributors. The result, contrary to theory, is a resurgence of vertical integration, which significantly impacts the industrial organization of several high-tech fields. Professor Lee will conclude by evaluating the costs and benefits of vertically integrated innovative industries, suggesting private and public mechanisms for improving integration and tempering its excesses.

The speaker:

Peter Lee teaches and writes in the areas of patent law, innovation, and technology transfer. His current scholarship explores the institutional context of innovation as well as the intersection of intellectual property law and academic science. His recent works have appeared in The Yale Law JournalCalifornia Law ReviewDuke Law JournalMichigan Law Review, and other leading journals. Professor Lee has received numerous awards for his scholarly work, including the UC Davis Chancellor’s Fellowship, the Samsung-Stanford Patent Prize, and inclusion in West/Thomson’s annual Intellectual Property Law Review. He has served as a Visiting Scholar at Melbourne Law School and speaks widely on intellectual property matters in the United States and abroad.

Professor Lee received his undergraduate degree from Harvard University, where he studied the history and philosophy of science. He received his J.D. from Yale Law School, where he was a member of The Yale Law Journal. Professor Lee joined the UC Davis faculty after clerking for Judge Barry G. Silverman of the Ninth Circuit Court of Appeals.

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About Timo Minssen

Timo Minssen is Professor of Biotechnology Law specializing in legal aspects of biomedical innovation at the University of Copenhagen (UCPH), Centre for Information & Innovation Law (CIIR), Denmark. Before joining UCPH, Timo graduated from law school in Göttingen (Germany) in 2001 and was trained in the German court system from 2002-2003. He also passed the Swedish “juris licentiate” (LL.Lic.) and “juris doctor” exams (LL.D.) and holds two IP- and Biotech- related masters degrees from the Universities of Uppsala and Lund (Sweden). In addition he worked for a Life Science company and for various law firms in Sweden and Germany. From 2007-2009 Timo was a stipendiary at the Max Planck Institute for Intellectual Property and Competition Law in Munich. He was also responsible for a course in comparative patent law at the Chicago-Kent College of Law (USA) and worked for the European Patent Office. At Lund University he is engaged as a teacher at the Faculty of Law and in interdisciplinary epigenetics research at the Pufendorf Institute for Advanced Studies. At UCPH he is co-leading CIIR’s Copenhagen Biotech & Pharma Forum and teaches international classes for both students and pharma professionals in EU-, Competition-, and Pharmaceutical Law and IPR. Timo is a frequent speaker on a variety of topics and has published extensively in comparative US and European patent law, EU- and Competition Law. In 2013-14, he was a Visiting Scholar at Harvard Law School's Petrie-Flom Center and at the University of Oxford. In 2016 he will be Visiting Research Fellow at the University of Cambridge.