Competition, Innovation and Racing for Priority at the U.S. Patent and Trademark Office
AbstractWhen two inventors file patent applications with overlapping, or "interfering" claims, the U.S. patent rights are awarded to the applicant who establishes priority of invention. Patent interference cases are litigated at the U.S. Patent and Trademark Office's Board of Patent Appeals and Interferences. The cases offer a unique window into competition between firms in research and innovation. This paper analyzes a random sample of interferences to investigate the impact of patent policies on innovation strategies. Our results contribute to the policy debate over the appropriate scope of patents and the revision of the U.S. patent priority structure. We find that while interference cases are in general rare, they are highly concentrated among chemical and biomedical firms. Biotechnology patent applications are so likely to be subject to interference litigation that a question arises about their character: a high rate of interfering means that multiple researchers are chasing a large patent prize associated with a well-defined research topic. This in turn suggests that either the scope of biotechnology patents is too broad or the bar for obviousness has been set too low. Alternatively, the benefits of competition and patent racing to innovation are clear in the patent filing behavior of incumbent and challenger firms. Our empirical results suggest that incumbent firms delay filing patent applications relative to challengers, consistent with the hypothesis that incumbents attempt to delay the introduction of new technologies. But competition from an interference challenge leads incumbents to accelerate filing their patent applications, and thus both the commercialization of new technology and the diffusion of technological information. Strategic filing is exacerbated by the unique U.S. priority structure, which awards disputed patent rights to an inventor who proves that he or she is first-to-invent rather than first to file. Reforming the priority structure, a goal of current efforts to harmonize U.S. patent policies with other countries, has been controversial because of its alleged benefits to entrepreneurs. We find no evidence for the claim that the system benefits small firms or individual inventors over large organizations with patent filing expertise. Instead, we find that the system empowers incumbent firms who seek to delay filing their patent applications, knowing that if they lose the race to the patent office they can still obtain the intellectual property rights with a first-to-invent showing.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Regulation2point0 in its series Working paper with number 235.
Date of creation: Nov 2005
Date of revision:
Contact details of provider:
Web page: http://regulation2point0.org/
Other versions of this item:
- Linda R. Cohen & Jun Ishii, 2005. "Competition, Innovation and Racing for Priority at the U.S. Patent and Trademark Office," Working Papers 050604, University of California-Irvine, Department of Economics.
- K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jean LANJOUW & Josh LERNER, 1998. "The Enforcement of Intellectual Property Rights: A Survey of the Empirical Literature," Annales d'Economie et de Statistique, ENSAE, issue 49-50, pages 223-246.
- Czarnitzki, Dirk & Kraft, Kornelius, 2004.
"An empirical test of the asymmetric models on innovative activity: who invests more into R&D, the incumbent or the challenger?,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 54(2), pages 153-173, June.
- Czarnitzki, Dirk & Kraft, Kornelius, 2000. "An empirical test of the asymmetric models on innovative activity: who invests more into R&D - the incumbent or the challenger?," ZEW Discussion Papers 00-10, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Mark Schankerman, 1998. "How Valuable is Patent Protection? Estimates by Technology Field," RAND Journal of Economics, The RAND Corporation, vol. 29(1), pages 77-107, Spring.
- Bronwyn H. Hall & Stuart Graham & Dietmar Harhoff & David C. Mowery, 2004.
"Prospects for Improving U.S. Patent Quality via Postgrant Opposition,"
in: Innovation Policy and the Economy, Volume 4, pages 115-144
National Bureau of Economic Research, Inc.
- Bronwyn H. Hall & Stuart J.H. Graham & Dietmar Harhoff, 2003. "Prospects for Improving U.S. Patent Quality via Post-grant Opposition," NBER Working Papers 9731, National Bureau of Economic Research, Inc.
- Hall, Bronwyn H. & Graham, Stuart J. H. & Harhoff, Dietmar & Mowery, David C., 2003. "Prospects for Improving U.S. Patent Quality via Post-grant Opposition," Competition Policy Center, Working Paper Series qt4wq4g70r, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Bronwyn H. Hall & Stuart J. H. Graham & Dietmar Harhoff & David C. Mowery, 2004. "Prospects for Improving U.S. Patent Quality via Post-grant Opposition," Law and Economics 0401002, EconWPA.
- Hall, Bronwyn H. & Graham, Stuart J. H. & Harhoff, Dietmar & Mowery, David C., 2003. "Prospects for Improving U.S. Patent Quality via Post-grant Opposition," Department of Economics, Working Paper Series qt8fg5b6bs, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Reinganum, Jennifer F, 1982. "A Dynamic Game of R and D: Patent Protection and Competitive Behavior," Econometrica, Econometric Society, vol. 50(3), pages 671-88, May.
- Adam B. Jaffe & Manuel Trajtenberg, 2005. "Patents, Citations, and Innovations: A Window on the Knowledge Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 026260065x, January.
- Jean O. Lanjouw & Josh Lerner, 1997. "The Enforcement of Intellectual Property Rights: A Survey of the Empirical Literature," NBER Working Papers 6296, National Bureau of Economic Research, Inc.
- 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.
- Josh Lerner, 1997. "An Empirical Exploration of a Technology Race," RAND Journal of Economics, The RAND Corporation, vol. 28(2), pages 228-247, Summer.
- George L. Priest & Benjamin Klein, 1984. "The Selection of Disputes for Litigation," The Journal of Legal Studies, University of Chicago Press, vol. 13(1), pages 1-56, January.
- Reinganum, Jennifer F., 1989. "The timing of innovation: Research, development, and diffusion," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 14, pages 849-908 Elsevier.
- Cockburn, Iain. & Henderson, Iain., 1994.
"Racing to invest? : the dynamics of competition in ethical drug discovery,"
3710-94., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Cockburn, Iain & Henderson, Rebecca, 1994. "Racing to Invest? The Dynamics of Competition in Ethical Drug Discovery," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(3), pages 481-519, Fall.
- Acs, Zoltan J & Audretsch, David B, 1988. "Innovation in Large and Small Firms: An Empirical Analysis," American Economic Review, American Economic Association, vol. 78(4), pages 678-90, September.
- Kaz Miyagiwa & Yuka Ohno, 2012.
"International Harmonization of the Patent-Issuing Rules,"
ISER Discussion Paper
0837, Institute of Social and Economic Research, Osaka University.
- Kaz Miyagiwa & Yuka Ohno, 2012. "International Harmonization of the Patent-issuing Rules," Emory Economics 1203, Department of Economics, Emory University (Atlanta).
- Graham, Stuart J.H. & Harhoff, Dietmar, 2006.
"Can Post-Grant Reviews Improve Patent System Design? A Twin Study of US and European Patents,"
Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems
38, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Graham, Stuart J.H. & Harhoff, Dietmar, 2006. "Can Post-Grant Reviews Improve Patent System Design? A Twin Study of US and European Patents," CEPR Discussion Papers 5680, C.E.P.R. Discussion Papers.
- Carl Shapiro, 2007.
"Patent Reform: Aligning Reward and Contribution,"
NBER Working Papers
13141, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Archive Maintainer).
If references are entirely missing, you can add them using this form.