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Let's Make Software Patentable...or Maybe Let's Not: Evidence from the Indian Software Industry

work, Entrepreneurship, and finance

This paper analyzes the impact of changes in the availability of patent protection for software in India over the past decade. We find that a proposed broadening of patent eligible subject matter to include software had a large positive effect on average on companies' stock market returns in India, but little effect on their patenting behavior. An unanticipated reversal of this proposed policy change resulted in substantial negative stock market returns. Our analysis of the link between the availability of patent protection on software and companies' focus on (customized) software services versus software products does not yield any strong evidence that the availability of patent protection affects the type of software produced by companies.

526wp_0.pdf (1.43 MB)
Marcel Fafchamps
Markus Eberhardt
Christian Helmers
Manasa Patnam
Publication Date
October, 2014