Patent office in innovation policy: Nobody's perfect
AbstractThe number of patent applications and "bad" patents issued has been rising rapidly in recent years. Based on this trend, we study the overload problem within the Patent Office and its consequences on the firms' R&D incentives. We assume that the examination process of patent applications is imperfect, and that its quality is poorer under congestion. Depending on policy instruments such as submission fees and the toughness of the non-obviousness requirement, the system may result in a high-R&D equilibrium, in which firms self-select in their patent applications, or in an equilibrium with low R&D, opportunistic patent applications and the issuance of bad patents. Multiple equilibria often co-exist, which deeply undermines the effectiveness of policy instruments. We investigate the robustness of our conclusions as to how the value of patent protection is formalized, taking into consideration the introduction of a penalty system for rejected patent applications, as well as the role of commitment to a given patent protection policy.
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Bibliographic InfoArticle provided by Elsevier in its journal International Journal of Industrial Organization.
Volume (Year): 29 (2011)
Issue (Month): 2 (March)
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Web page: http://www.elsevier.com/locate/inca/505551
Patent Office Patent quality Congestion Innovation;
Other versions of this item:
- Bernard Caillaud & Anne Duchene, 2009. "Patent Office in innovation policy: Nobody's perfect," PSE Working Papers halshs-00575019, HAL.
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- Christian Le Bas & Julien Pénin, 2014. "Patents and innovation : Are the brakes broken, or how to restore patents’ dynamic efficiency ?," Working Papers of BETA 2014-02, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
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- Langinier, Corinne & Marcoul, Philippe, 2007. "Patents, Search of Prior Art, and Revelation of Information," Staff General Research Papers 10489, Iowa State University, Department of Economics.
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