The Spanish State Research Agency is funding, through the Europa Excelencia 2025 call, PATSALES, a project by Esade-Universitat Ramon Llull that analyses the impact of transparency in intellectual property transactions on business innovation, free market competition and knowledge transfer between companies.
Knowledge transfer processes are always complex. When a new technology is successfully developed, it is not always the researcher, their group or their company who brings the product to market. Many innovations change hands before becoming real products through the sale or licensing of patents, a fundamental mechanism for the knowledge generated in universities, research centres or innovative companies to find someone able to develop and commercialise it. However, these transactions usually take place away from the public eye and, in many cases, it is not known who has acquired a given technology and what implications it may have for the future of the sector.
To understand how this lack of information affects innovation, Esade-Universitat Ramon Llull leads the PATSALES project, funded by the Spanish State Research Agency (AEI) through the Europa Excelencia 2025 call. The team, led by Georgios Chondrakis, investigates the extent to which opacity or transparency in patent transactions (knowing who buys and sells a technology) influences the decisions of companies, investors and innovators, and whether this can affect the dissemination of knowledge positively or negatively, as well as shaping the functioning of technology markets by making them more or less efficient and competitive. The results could help to assess measures such as the creation of public registers of patent transactions or new transparency obligations.
An opaque market that drives innovation
Although they often go unnoticed by the general public, technology markets play an essential role in the economy and in the transfer of knowledge. Thanks to them, an organisation can transfer an invention to another company that has the industrial, financial or commercial capacity needed to bring it to market. This exchange allows researchers, universities and small R&D-focused companies to concentrate on generating new technologies while other organisations take charge of developing them and bringing them to society.
Understanding how these markets work is precisely the aim of PATSALES. As Georgios Chondrakis explains, it is about “better understanding the role of information disclosure in that market”. Although patents are public and anyone can consult the technical information they contain, the researcher points out that the identity of the actual owner is not always known. “One of the fundamental principles of the patent system is transparency”, he notes, “but the owner of a patent can remain hidden, and it may never be known who really holds it”.
This apparent contradiction has significant consequences. When a company acquires a strategic technology without the market knowing, its competitors lose a source of information that could help guide their own innovation decisions. At the same time, keeping these transactions secret may be part of a business strategy to preserve a competitive advantage.
The iPhone example: when a purchase changes a market
To explain why this issue can have significant economic consequences, Chondrakis turns to one of the best-known cases in the recent history of innovation: the development of the first iPhone. Before launching the device, Apple acquired the touchscreen technology developed by the company FingerWorks. The deal was not made public and the other competitors were unaware that the company was working in that direction. When the iPhone reached the market in 2007, it revolutionised the mobile phone sector and gave Apple an extraordinary competitive advantage.
According to the researcher, if that acquisition had been public, other companies could have interpreted Apple’s technological strategy earlier and accelerated the development of similar solutions. “If the market had known about that deal, competitors would very likely have developed similar technologies much sooner”, he explains. In his view, disclosing this type of transaction can facilitate the dissemination of knowledge, accelerate innovation and foster more competitive markets, with benefits for both companies and consumers.
However, the project itself starts from the idea that the answer is not simple. Greater transparency could also have less desirable effects. If companies knew that any strategic acquisition would be made public immediately, some might stop buying certain technologies to avoid revealing their innovation plans. That would reduce the dynamism of technology markets and could diminish the incentives for researchers and entrepreneurs to develop new solutions with the expectation of later selling them to large companies. “From a theoretical point of view it is not clear what the effect will be, because transparency can bring benefits but also generate costs for innovation”, Chondrakis summarises.
A pioneering experiment to measure the impact of transparency
The iPhone case reflects one of the project’s central questions. Can greater transparency accelerate innovation by allowing other companies to identify technological trends sooner? Or, on the contrary, would requiring these transactions to be disclosed discourage the purchase of new technologies and reduce the incentives to innovate?
To answer these questions, PATSALES will carry out a randomised controlled experiment with 210 small and medium-sized US companies in the pharmaceutical and semiconductor sectors, two fields where patents play a particularly important role. The approach is inspired by the clinical trials used in medicine. “Instead of patients we have companies and, instead of a medicine, we provide information about technology transactions”, the researcher explains. “The idea is to offer that information randomly in order to observe how companies react and how their behaviour changes”.
The team will subsequently analyse aspects such as the patents companies apply for, the technologies they invest in, the appearance of new products or the evolution of their research and development strategies. This information will be complemented by surveys of the companies to find out how they perceive competition, the degree of technological uncertainty or innovation opportunities. Combining both approaches will make it possible to understand not only what decisions organisations make, but also why they make them.
Scientific evidence to guide innovation policies
Although the experiment will be carried out in the United States, Chondrakis believes its results will have a direct application in Europe. The researcher explains that they chose the US market because it has a larger number of technology companies and offers better conditions for developing an experiment of these characteristics, but he stresses that the questions raised by the project are common to European economies.
The ultimate aim is to provide data to underpin a debate that until now has relied mainly on theoretical arguments. “We want there to be an evidence-based discussion about whether the mandatory disclosure of technology transactions is good or bad for the economy and for society”, he states, and this could eventually have an impact on new regulatory measures.