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Inventors and Impostors: An Analysis of Patent Examination with Self-Selection of Firms into R&D

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  • Florian Schuett

Abstract

Abstract: I present a model in which firms differing in R&D productivity choose between ambitious research projects, which are socially desirable, and unambitious ones, which are socially undesirable. The patent office must decide how rigorously to examine applications, which affects the probability of weeding out bad applications but also how firms self-select into more or less ambitious projects. Both the ex post and ex ante welfare effects need to be taken into account in determining the optimal examination intensity. The model allows me to assess the impact of various policy changes on examination and welfare, including the creation of specialized patent courts, post-grant opposition, and the delegation of fee-setting authority to the patent office. It generates a number of predictions that are consistent with empirical evidence on the patent system.
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Suggested Citation

  • Florian Schuett, 2013. "Inventors and Impostors: An Analysis of Patent Examination with Self-Selection of Firms into R&D," Journal of Industrial Economics, Wiley Blackwell, vol. 61(3), pages 660-699, September.
  • Handle: RePEc:bla:jindec:v:61:y:2013:i:3:p:660-699
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    Cited by:

    1. Schankerman, Mark & Schütt, Florian, 2016. "Screening for Patent Quality : Examination, Fees, and the Courts," Other publications TiSEM e9210a8e-ff3b-4f03-823b-a, Tilburg University, School of Economics and Management.
    2. Zonglai Kou & Patrick Rey & Tong Wang, 2013. "Non-Obviousness and Screening," Journal of Industrial Economics, Wiley Blackwell, vol. 61(3), pages 700-732, September.
    3. Schankerman, Mark & Schütt, Florian, 2016. "Screening for Patent Quality : Examination, Fees, and the Courts," Discussion Paper 2016-046, Tilburg University, Center for Economic Research.
    4. Nancy Gallini, 2017. "Do patents work? Thickets, trolls and antibiotic resistance," Canadian Journal of Economics, Canadian Economics Association, vol. 50(4), pages 893-926, November.
    5. Comino, Stefano & Graziano, Clara, 2015. "How many patents does it take to signal innovation quality?," International Journal of Industrial Organization, Elsevier, vol. 43(C), pages 66-79.
    6. Schankerman, Mark & Schütt, Florian, 2016. "Screening for Patent Quality : Examination, Fees, and the Courts," Other publications TiSEM fa319822-6e68-4e05-8547-4, Tilburg University, School of Economics and Management.

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    More about this item

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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