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Are Patent Fees Effective at Weeding Out Low-Quality Patents?

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  • Gaétan de Rassenfosse

    (École polytechnique fédérale de Lausanne)

  • Adam B. Jaffe

    (Motu Economic and Public Policy Research)

Abstract

The paper investigates whether patent fees are an effective mechanism to deter the filing of low-quality patent applications. The study analyses the effect of the Patent Law Amendment Act of 1982, which resulted in a substantial increase in patenting fees at the U.S. Patent and Trademark Office, on patent quality. Results from a series of difference-in-differences regressions suggest that the increase in fees led to a weeding out of low-quality patents. About 16–17 per cent of patents in the lowest quality decile were filtered out. The figure reaches 24–30 per cent for patents in the lowest quality quintile. However, the fee elasticity of quality decreased with the size of the patent portfolio held by applicants. The study has strong policy implications in the current context of concerns about declines in patent quality and the financial vulnerability of patent offices.

Suggested Citation

  • Gaétan de Rassenfosse & Adam B. Jaffe, 2015. "Are Patent Fees Effective at Weeding Out Low-Quality Patents?," Working Papers 15_01, Motu Economic and Public Policy Research.
  • Handle: RePEc:mtu:wpaper:15_01
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    Cited by:

    1. Higham, Kyle & de Rassenfosse, Gaétan & Jaffe, Adam B., 2021. "Patent Quality: Towards a Systematic Framework for Analysis and Measurement," Research Policy, Elsevier, vol. 50(4).
    2. Nagler, Markus & Sorg, Stefan, 2020. "The disciplinary effect of post-grant review – Causal evidence from European patent opposition," Research Policy, Elsevier, vol. 49(3).
    3. Gaetan de Rassenfosse & Kyle Higham, 2019. "Decentralising the Patent System," Working Papers 6, Chair of Innovation and IP Policy.
    4. Nagler, Markus & Sorg, Stefan, 2019. "The Disciplinary Effect of Post-Grant Review," Rationality and Competition Discussion Paper Series 155, CRC TRR 190 Rationality and Competition.
    5. Jurriën Bakker, 2017. "The log-linear relation between patent citations and patent value," Scientometrics, Springer;Akadémiai Kiadó, vol. 110(2), pages 879-892, February.
    6. Nuvolari, Alessandro & Tartari, Valentina & Tranchero, Matteo, 2019. "Patterns of innovation during the industrial revolution: a reappraisal using a composite indicator of patent quality," CEPR Discussion Papers 13958, C.E.P.R. Discussion Papers.
    7. De Rassenfosse, Gaétan & Decarolis, Francesco & Giuffrida, Leonardo Maria & Iossa, Elisabetta & Mollisi, Vincenzo & Raiteri, Emilio & Spagnolo, Giancarlo, 2019. "Buyers' Role in Innovation Procurement," CEPR Discussion Papers 13777, C.E.P.R. Discussion Papers.
    8. Baron, Justus, 2020. "Counting standard contributions to measure the value of patent portfolios - A tale of apples and oranges," Telecommunications Policy, Elsevier, vol. 44(3).
    9. Boeing, Philipp & Mueller, Elisabeth, 2019. "Measuring China's patent quality: Development and validation of ISR indices," China Economic Review, Elsevier, vol. 57(C).
    10. Gaetan de Rassenfosse & Marco Grazzi & Daniele Moschella & Gabriele Pellegrino, 2020. "International Patent Protection and Trade: Transaction-Level Evidence," Working Papers 8, Chair of Innovation and IP Policy.
    11. Kim, Nami & Kim, Eonsoo & Lee, Jongseon, 2021. "Innovating by eliminating: Technological resource divestiture and firms’ innovation performance," Journal of Business Research, Elsevier, vol. 123(C), pages 176-187.
    12. Clément Bonnet, 2017. "Measuring Inventive Performance with Patent Data: an Application to Low Carbon Energy Technologies," Working Papers 1709, Chaire Economie du climat.
    13. Joo Young Og & Krzysztof Pawelec & Byung-Keun Kim & Rafal Paprocki & EuiSeob Jeong, 2020. "Measuring Patent Value Indicators with Patent Renewal Information," Journal of Open Innovation: Technology, Market, and Complexity, MDPI, Open Access Journal, vol. 6(1), pages 1-16, March.
    14. 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.
    15. Christian Le Bas & Julien Pénin, 2014. "Patents and innovation : Are the brakes broken, or how to restore patents’ dynamic efficiency ?," Working Papers of BETA 2014-02, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.

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    More about this item

    Keywords

    Patents; Patent fees; Patent quality; Innovation; Invention;
    All these keywords.

    JEL classification:

    • K2 - Law and Economics - - Regulation and Business Law
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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