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The Cost Factor in Patent Systems

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  • Francois, Didier
  • van Pottelsberghe de la Potterie, Bruno

Abstract

The objective of this paper is to assess whether and to what extent the cost of patenting affects the demand for patents. The empirical analysis, which focuses on the patent systems of the USA, Japan, and Europe during the year 2003, leads to the following methodological and empirical observations: i) after the grant, the translation, validation and transaction costs induced by an effective protection in several European countries witness a highly fragmented and very expensive European market for intellectual property; ii) for a proper international comparison, the size of the market and the average number of claims must be accounted for; iii) when the cost per claim per capita (the 3C-index) is considered, a negative linear relationship appears between the cost of patenting and the number of claims that are filed; iv) for a patent designating 13 European countries, the 3C-index is about 10 (2) times higher than in the US (Japanese) system (for process and translation costs up to the grant); v) The European market being more than twice as large as the US market in terms of inhabitants, the 3C-index suggests that there would be a clear justification for higher nominal examination fees at the EPO, that would ensure a rigorous granting process.

Suggested Citation

  • Francois, Didier & van Pottelsberghe de la Potterie, Bruno, 2006. "The Cost Factor in Patent Systems," CEPR Discussion Papers 5944, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:5944
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    References listed on IDEAS

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    1. Harhoff, Dietmar & Wagner, Stefan, 2005. "Modelling the duration of patent examination at the European Patent Office," CEPR Discussion Papers 5283, C.E.P.R. Discussion Papers.
    2. 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.
    3. Bruno Van Pottelsberghe & Herman Denis & Dominique Guellec, 2001. "Using patent counts for cross-country comparisons of technology output," ULB Institutional Repository 2013/6227, ULB -- Universite Libre de Bruxelles.
    4. Archontopoulos, Eugenio & Guellec, Dominique & Stevnsborg, Niels & van Pottelsberghe de la Potterie, Bruno & van Zeebroeck, Nicolas, 2007. "When small is beautiful: Measuring the evolution and consequences of the voluminosity of patent applications at the EPO," Information Economics and Policy, Elsevier, vol. 19(2), pages 103-132, June.
    5. Carine Peeters & Bruno Pottelsberghe de la Potterie, 2007. "Innovation strategy and the patenting behavior of firms," Springer Books, in: Uwe Cantner & Franco Malerba (ed.), Innovation, Industrial Dynamics and Structural Transformation, pages 345-371, Springer.
    6. Guellec, Dominique & Pottelsberghe de la Potterie, Bruno v., 2000. "Applications, grants and the value of patent," Economics Letters, Elsevier, vol. 69(1), pages 109-114, October.
    7. Emmanuel Duguet & Isabelle Kabla, 1998. "Appropriation Strategy and the Motivations to Use the Patent System: An Econometric Analysis at the Firm Level in French Manufacturing," Annals of Economics and Statistics, GENES, issue 49-50, pages 289-327.
    8. Tong, Xuesong & Frame, J. Davidson, 1994. "Measuring national technological performance with patent claims data," Research Policy, Elsevier, vol. 23(2), pages 133-141, March.
    9. Lazaridis, George & van Pottelsberghe de la Potterie, Bruno, 2007. "The rigour of EPO's patentability criteria: An insight into the "induced withdrawals"," World Patent Information, Elsevier, vol. 29(4), pages 317-326, December.
    10. Bronwyn H. Hall & Stuart Graham & Dietmar Harhoff & David C. Mowery, 2004. "Prospects for Improving U.S. Patent Quality via Postgrant Opposition," NBER Chapters, in: Innovation Policy and the Economy, Volume 4, pages 115-144, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    cost elasticity; cost per claim per capita; patent systems; patents;
    All these keywords.

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • P14 - Economic Systems - - Capitalist Systems - - - Property Rights
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems

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