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Patents, Search of Prior Art, and Revelation of Information

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  • Langinier, Corinne
  • Marcoul, Philippe

Abstract

This paper examines the strategic non-revelation of information by innovators when applying for patents. The lack of accessible prior art (i.e., an existing set of related inventions) may be responsible for the granting of questionable patents by examiners. In a model of a bilateral search of information we show that an innovator can conceal some information to increase the probability of being granted a patent, and the examiner makes her screening intensity contingent upon the level of prior art transmitted. We then analyze the effects of two policy changes: an existing one, called the Second Pair of Eyes Review, and another in which examiners ex ante commit to screening efforts. Even though the implementation of the former policy reduces strategic non-revelation, its overall implication remains unclear. The latter policy that involves equal screening intensity across all applications requires a limited commitment power from the examiner and induces truthful information transmission.

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 10489.

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Date of creation: 01 Jan 2007
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Handle: RePEc:isu:genres:10489

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Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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Web page: http://www.econ.iastate.edu
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  1. Graham, Stuart J. H. & Hall, Bronwyn H. & Harhoff, Dietmar & Mowery, David C., 2002. "Post-Issue Patent "Quality Control": A Comparative Study of US Patent Re-Examinations and European Patent Oppositions," Department of Economics, Working Paper Series, Department of Economics, Institute for Business and Economic Research, UC Berkeley qt2qt097bd, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  2. Strausz, Roland, 2006. "Timing of verification procedures: Monitoring versus auditing," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 59(1), pages 89-107, January.
  3. Jonathan Coppel, 2000. "E-Commerce: Impacts and Policy Challenges," OECD Economics Department Working Papers 252, OECD Publishing.
  4. Crampes, Claude & Langinier, Corinne, 2002. "Litigation and Settlement in Patent Infringement Cases," Staff General Research Papers, Iowa State University, Department of Economics 5231, Iowa State University, Department of Economics.
  5. Mitusch, Kay, 2006. "Non-commitment in performance evaluation and the problem of information distortions," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 60(4), pages 507-525, August.
  6. Lanjouw, Jean O & Schankerman, Mark, 2001. "Characteristics of Patent Litigation: A Window on Competition," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 129-51, Spring.
  7. Caillaud, Bernard & Duchêne, Anne, 2011. "Patent office in innovation policy: Nobody's perfect," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 29(2), pages 242-252, March.
  8. Lerner, Josh, 1995. "Patenting in the Shadow of Competitors," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 38(2), pages 463-95, October.
  9. Fahad Khalil, 1997. "Auditing Without Commitment," RAND Journal of Economics, The RAND Corporation, vol. 28(4), pages 629-640, Winter.
  10. Schankerman, Mark & Scotchmer, Suzanne, 2001. "Damages and Injunctions in Protecting Intellectual Property," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 199-220, Spring.
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Cited by:
  1. Langinier, Corinne & Marcoul, Phillipe, 2009. "Monetary and Implicit Incentives of Patent Examiners," Working Papers 2009-22, University of Alberta, Department of Economics.
  2. Florian Schuett, 2013. "Patent quality and incentives at the patent office," RAND Journal of Economics, RAND Corporation, vol. 44(2), pages 313-336, 06.
  3. Picard, Pierre M & van Pottelsberghe de la Potterie, Bruno, 2011. "Patent Office Governance and Patent System Quality," CEPR Discussion Papers, C.E.P.R. Discussion Papers 8338, C.E.P.R. Discussion Papers.

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