Nest without birds: Inventor mobility and the left-behind patents

Abstract

The mobility of inventors leaves behind their patented inventions at sourcing firms, yet there is little scholarly insight into how firms handle those intellectual properties. We investigate this important issue by developing a framework of tacit-codified knowledge interdependence. We theorize that tacit and codified knowledge offer the intellectual and legal pillars of corporate inventions, which complement each other in value creation. Inventor mobility decouples the two pillars and reduces the maintenance likelihood of the left-behind patents. The negative impact is greater for inventions that are complex or rely less on internal prior art because the tacit knowledge loss is more destructive and unrecoverable. However, when inventors move to competing or litigious target firms, the relationship between mobility and patent maintenance becomes less negative or even turns positive because the left-behind patents can be leveraged to hedge against the risk of knowledge leakage. Applying a two-stage Coarsened Exact Matching approach to construct a sample of 36,204 U.S. patents with comparable leaving and staying inventors from public firms between 1983 and 2010, we find strong evidence supporting our framework. Our findings highlight the intricate interdependence of tacit and codified knowledge in corporate inventions and add to the literatures on inventor mobility and intellectual property management.