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

Oct 2014
Working Paper
Marcel Fafchamps, Markus Eberhardt, Christian Helmers, Manasa Patnam

This paper analyzes the impact of changes in the availability of patent protection for software in India over the past decade. We nd 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 eect 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 ev- idence that the availability of patent protection aects the type of software produced by companies.

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