Digital “Mash-ups,” Patents, and Copyright

Are our intellectual property (IP) institutions effective for a new generation of digital innovations? To make progress on this question, this paper analyzes a novel dataset on mobile app developers’ use of patents and copyright, product revenues, licensing and outsourcing, and product and developer characteristics. We find within-industry heterogeneity in patent and copyright use, even among
seemingly similar suppliers selling similar products. This pattern of IP use, along with consequent revenues and propensity to engage in IP trade is closely associated with the specific nature of innovations embodied in the products. Therefore, whereas patent and copyright use historically have differed across industries while tending to be similar across suppliers within the same industry, the "mash-up" nature of digital products (amalgams of programs, datasets, graphics, algorithms, etc.) results in unusually finer-grained differences within industries. Pliant digital product development choices and IP choices go hand-in-hand.