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On the Price Elasticity of Demand for Patents

  • Gaetan de Rassenfosse
  • Bruno van Pottelsberghe de la Potterie

This paper investigates whether patent fee policies are a potential factor underlying the boom in patent applications observed in major patent offices. We provide the first panel-based evidence suggesting that fees affect the demand for patents in three major patent offices (EPO, USPTO and JPO), with a price elasticity of about -0.4 (similar to that of the residential demand for oil or water). The laxity of fee policies adopted by patent offices over the past 25 years therefore contributed, to a significant extent, to the rising propensity to patent observed since the mid-nineties. This is especially true at the European Patent Office, which has dramatically decreased its fees since the mid-1990s.

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Article provided by Department of Economics, University of Oxford in its journal Oxford Bulletin of Economics and Statistics.

Volume (Year): 74 (2012)
Issue (Month): 1 (02)
Pages: 58-77

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Handle: RePEc:bla:obuest:v:74:y:2012:i:1:p:58-77
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  1. Adam B. Jaffe & Josh Lerner, 2006. "Innovation and its Discontents," NBER Chapters, in: Innovation Policy and the Economy, Volume 6, pages 27-66 National Bureau of Economic Research, Inc.
  2. Eugenio Archontopoulos & Dominique Guellec & Niels Stevnsborg & Bruno Van Pottelsberghe & Nicolas van Zeebroeck, 2007. "When small is beautiful: measuring the evolution and consequences of the voluminosity of patent applications at the EPO," ULB Institutional Repository 2013/6191, ULB -- Universite Libre de Bruxelles.
  3. van Pottelsberghe de la Potterie, Bruno & van Zeebroeck, Nicolas, 2007. "A Brief History of Space and Time: the Scope-Year Index as a Patent Value Indicator Based on Families and Renewals," CEPR Discussion Papers 6321, C.E.P.R. Discussion Papers.
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  6. de Rassenfosse, Gaétan & van Pottelsberghe de la Potterie, Bruno, 2007. "Per un Pugno di Dollari: A first Look at the Price Elasticity of Patents," CEPR Discussion Papers 6499, C.E.P.R. Discussion Papers.
  7. Harhoff, Dietmar & Wagner, Stefan, 2006. "Modeling the Duration of Patent Examination at the European Patent Office," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 170, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
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  10. Christophe HURLIN & V. MIGNON, 2006. "Une synthèse des tests de co-intégration sur données de panel," Working Papers 1724, Orleans Economic Laboratorys, University of Orleans.
  11. de Rassenfosse, Gaetan & van Pottelsberghe de la Potterie, Bruno, 2009. "A policy insight into the R&D-patent relationship," Research Policy, Elsevier, vol. 38(5), pages 779-792, June.
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  20. Dominique Guellec & Bruno Van Pottelsberghe & Nicolas van Zeebroeck, 2007. "Patent as a market instrument," ULB Institutional Repository 2013/60728, ULB -- Universite Libre de Bruxelles.
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