Dear Faculty and Fellow Ph.D. Students,

I cordially invite you to attend my dissertation defense scheduled for Thursday, April 13th at 11:00 AM EST. The location will be Scheller College of Business, Room 318. If you're unable to attend in person, you can join us via Zoom https://gatech.zoom.us/j/99971098508.

The abstract is included below, and copies of the proposal are available upon request.

Best Regards,

Leonardo Ortega

Area: Strategy and Innovation

Committee Members: Dr. Peter Thompson (Chair), Dr. Alex Oettl, Dr. Marco Ceccagnoli, Dr. Stuart Graham, and Dr. Annamaria Conti (IE Business School).

Dissertation title: Strategic use of Intellectual Property Rights.

Essay 1: Import Competition and the Demand for External Technologies

Abstract: The market for technology in the U.S. has grown exponentially in the last 30 years. This has corresponded with massive growth in imports across the industrialized world from newly industrialized economies. This study empirically examines whether markets for technology provide a possible alternative to in-house innovation as a strategic response to "escape competition." Using patent reassignments activity to measure access to external technologies, I evaluate the effect of Chinese import competition on the demand by U.S. manufacturing firms for external technologies during the period 1991-2007. The findings indicate that while external technologies are important for innovative firms, low-productivity firms experience a negative impact on the demand for external technologies when exposed to import competition. This negative impact extends to all firms when the external technologies considered are novel to them. Although exposure to import competition does not necessarily prompt firms to seek external technologies to escape competition, it could hinder the demand for external technologies related to exploring new technological spaces.

Essay 2: Sharpen your Sword for Litigation: Incumbent Strategic Reaction to the Threat of Entry

Abstract: While patents have been shown to play a role as barriers to entry, they also reveal information about incumbent strategies and risk being invalidated. We examine the tradeoff incumbents face between using their patents ex-ante as entry deterrents or ex-post once competitors have revealed their moves. Leveraging the unique characteristics of the pharmaceutical sector, where it is possible to observe exactly when a competitor entry threat materializes, and exploiting exogenous variation in that timing, we show that incumbents intentionally fragment and delay the full disclosure of their intellectual property rights through continuation patents. They disproportionately reveal continuation patents after a competitor entry threat becomes concrete, tailoring their response to the threat they have received and successfully delaying competitor entry through litigation. The detected incumbents' reaction is stronger when their attacked drugs are valuable and when the patents listed at the FDA approval of a drug are relatively narrow in scope.

Essay 3: Overreaction in Firm Sourcing Decisions: Evidence from Patent Prosecution Services

Abstract: How do firms deal with information asymmetry to reduce the transaction costs of market-based solutions? Do behavioral biases play a role in managing supplier relationships? This paper provides empirical evidence on how external sources of information serve to reduce the knowledge difference between firms and suppliers engaged in market exchanges. Analyzing the sourcing of patent prosecution services in the U.S. and using patent litigation as an exogenous source of variation in exposure to external experts evaluating litigated patents (i.e., litigating patent attorneys), this paper shows that firms exposed to patent litigation are more likely to change the sourcing of patent prosecution legal services relative to unexposed firms working with the same prosecuting law firm. Moreover, this paper finds that firms behave similarly in cases where patent weaknesses detected in litigation are associated either with actions taken by the prosecuting law firm or with actions taken by the patenting firm. This result suggests that firms may overreact to information from patent litigation. These findings advance our understanding of how outsourcing firms offset the negative effects of information asymmetries and how firms' limited ability to translate external information into signals can moderate this effect.