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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. van Zeebroeck, Nicolas & van Pottelsberghe de la Potterie, Bruno & Guellec, Dominique, 2009. "Claiming more: the Increased Voluminosity of Patent Applications and its Determinants," Research Policy, Elsevier, vol. 38(6), pages 1006-1020, July.
  2. Bruno Van Pottelsberghe & Eugenio Archontopoulos & Dominique Guellec & Niels Stevnsborg & Nicolas van Zeebroeck, 2006. "When small is beautiful: measuring the evolution and consequences of the voluminosity of patent applications at the EPO," Working Papers CEB 06-019.RS, ULB -- Universite Libre de Bruxelles.
  3. Gaétan de Rassenfosse & Bruno Van Pottelsberghe, 2007. "Per un pugno di dollari: A first look at the price elasticity of patents," Working Papers CEB 07-022.RS, ULB -- Universite Libre de Bruxelles.
  4. 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.
  5. Gaétan de Rassenfosse & Bruno Van Pottelsberghe, 2008. "A Policy Insight into the R&D-Patent Relationship," Working Papers ECARES 2008_007, ULB -- Universite Libre de Bruxelles.
  6. Bruno van Pottelsberghe, 2008. "The London Agreement and the cost of patenting in Europe," Working Papers 264, Bruegel.
  7. Giovanni S.F. Bruno, 2004. "Approximating the Bias of the LSDV Estimator for Dynamic Unbalanced Panel Data Models," KITeS Working Papers 159, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2004.
  8. Christophe Hurlin & Valérie Mignon, 2007. "Une synthèse des tests de cointégration sur données de panel," Économie et Prévision, Programme National Persée, vol. 180(4), pages 241-265.
  9. Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)," NBER Working Papers 7552, National Bureau of Economic Research, Inc.
  10. Christophe Hurlin & Valérie Mignon, 2006. "Une synthèse des tests de cointégration sur données de panel," Working Papers halshs-00070887, HAL.
  11. 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.
  12. Jasper M. Dalhuisen & Raymond J. G. M. Florax & JHenri L. F. de Groot & Peter Nijkamp, 2003. "Price and Income Elasticities of Residential Water Demand: A Meta-Analysis," Land Economics, University of Wisconsin Press, vol. 79(2), pages 292-308.
  13. Bruno Van Pottelsberghe & Nicolas van Zeebroeck, 2007. "A brief history of space and time: the scope-year index as a patent value indicator based on families and renewals," Working Papers CEB 07-019.RS, ULB -- Universite Libre de Bruxelles.
  14. Pasaran, M.H. & Im, K.S. & Shin, Y., 1995. "Testing for Unit Roots in Heterogeneous Panels," Cambridge Working Papers in Economics 9526, Faculty of Economics, University of Cambridge.
  15. Christophe Hurlin & Valérie Mignon, 2006. "Une Synthèse des Tests de Racine Unitaire sur Données de Panel," Post-Print halshs-00078770, HAL.
  16. David Encaoua & Dominique Guellec & Catalina Martínez, 2006. "Patent Systems for Encouraging Innovation: Lessons from Economic Analysis," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00177614, HAL.
  17. Damiaan Persyn & Joakim Westerlund, 2008. "Error-correction–based cointegration tests for panel data," Stata Journal, StataCorp LP, vol. 8(2), pages 232-241, June.
  18. Kiviet, Jan F., 1995. "On bias, inconsistency, and efficiency of various estimators in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 68(1), pages 53-78, July.
  19. Dominique Guellec & Bruno Van Pottelsberghe & Nicolas van Zeebroeck, 2007. "Patent as a market instrument," ULB Institutional Repository 2013/60728, ULB -- Universite Libre de Bruxelles.
  20. Nicolas van Zeebroeck, 2007. "Patents only live twice: a patent survival analysis in Europe," Working Papers CEB 07-028.RS, ULB -- Universite Libre de Bruxelles.
  21. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
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