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The Consequences of Radical Patent-Regime Change

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  • Donges, Alexander
  • Selgert, Felix

Abstract

This paper analyzes the consequences of radical patent-regime change by exploiting a natural experiment: the forced adoption of the Prussian patent system in territories annexed after the Austro-Prussian War of 1866. Compared to other German states, Prussia granted patents more restrictively by setting higher novelty requirements. Though, patent fees were much lower. By using novel hand-collected data, we show that the forced adoption of the Prussian patent law caused a massive drop in the number of patents per capita in annexed territories. By contrast, we find a significantly positive effect of patent-regime change on world-fair exhibits per capita, which we use as a proxy for non-patented innovation. We interpret this finding as evidence that restricting the granting of patents, which creates more competition, is conducive for the generation of innovation.

Suggested Citation

  • Donges, Alexander & Selgert, Felix, 2019. "The Consequences of Radical Patent-Regime Change," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203662, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc19:203662
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    More about this item

    Keywords

    Innovation; Intellectual Property; Patents; Patent Law; Technological Change;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • N0 - Economic History - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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