Positive or negative: Impact of foreign patent pools on innovation capabilities of local firms in China

High tech companies in developing countries such as in China often encounter evolution problems in innovation capability, typically in fast growing technical fields as ICT or bio-technology. The major challenge comes from overseas technical superpowers with their patented sources, typically in patent pool cases. Interesting debates have been continually developed on functions of patent pools initiated and organized by overseas companies: is such exogenous power generates positive technology spillover through competition or negative pressure over innovation capabilities of local firms in China. This study is conducted on patent pool issue particularly on this impact nature, through investigation of patent records in China over corresponding technical fields where international Patent Pools are operating by member companies. DVD, as one of the typical pools operating in China, is major focus in this paper. The impact level by patenting and granted patents of In Pool Firms (IPFs) upon other Non-Pooled Firms´ patenting and granted patent is studied. Particularly, four different kinds of impact situations are analyzed.