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Product Development and the Timing of Information Disclosure under U.S.and Japanese Patent Systems

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  • Reiko Aoki
  • Thomas J. Prusa

Abstract

This paper examines the consequences of the differences in the timing of information disclosure between the U.S. and Japanese patent systems. Under the Japanese system it is possible for a firm to apply for a patent knowing the exact specifications of a rival's patent application. In contrast, in the U.S. the only way a firm learns about a rival's innovation is upon the actual granting of the rival's patent. We argue that this difference enables Japanese firms to coordinate their R&D efforts better than their U.S. counterparts and that this, in turn, leads to smaller quality improvements under the Japanese system. We show that the creation/diffusion tradeoff of patents can be influenced not only by the scope and length of patent protection but also by other features of the patenting process.

Suggested Citation

  • Reiko Aoki & Thomas J. Prusa, 1995. "Product Development and the Timing of Information Disclosure under U.S.and Japanese Patent Systems," NBER Working Papers 5063, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:5063
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    1. Suzanne Scotchmer & Jerry Green, 1990. "Novelty and Disclosure in Patent Law," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 131-146, Spring.
    2. Reinganum, Jennifer F, 1982. "A Dynamic Game of R and D: Patent Protection and Competitive Behavior," Econometrica, Econometric Society, vol. 50(3), pages 671-688, May.
    3. Nancy T. Gallini, 1992. "Patent Policy and Costly Imitation," RAND Journal of Economics, The RAND Corporation, vol. 23(1), pages 52-63, Spring.
    4. Janusz A. Ordover, 1991. "A Patent System for Both Diffusion and Exclusion," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 43-60, Winter.
    5. Jaskold Gabszewicz, J. & Thisse, J. -F., 1979. "Price competition, quality and income disparities," Journal of Economic Theory, Elsevier, vol. 20(3), pages 340-359, June.
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    Cited by:

    1. Ananish Chaudhuri, 2002. "A Simple Algebraic Approach to Teaching Oligopoly Models," The American Economist, Sage Publications, vol. 46(1), pages 36-41, March.
    2. Kamal Saggi, 2016. "Trade, Intellectual Property Rights, and the World Trade Organization," Vanderbilt University Department of Economics Working Papers 16-00014, Vanderbilt University Department of Economics.
    3. Aoki, Reiko & Spiegel, Yossi, 2009. "Pre-grant patent publication and cumulative innovation," International Journal of Industrial Organization, Elsevier, vol. 27(3), pages 333-345, May.
    4. George Chondrakis & Carlos J. Serrano & Rosemarie H. Ziedonis, 2021. "Information disclosure and the market for acquiring technology companies," Strategic Management Journal, Wiley Blackwell, vol. 42(5), pages 1024-1053, May.
    5. Jaffe, Adam B., 2000. "The U.S. patent system in transition: policy innovation and the innovation process," Research Policy, Elsevier, vol. 29(4-5), pages 531-557, April.
    6. Deepak Hegde & Hong Luo, 2018. "Patent Publication and the Market for Ideas," Management Science, INFORMS, vol. 64(2), pages 652-672, February.
    7. Kaz Miyagiwa, 2015. "The 2011 America Invents Act: Does it Undermine Innovation?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 24(2), pages 211-227, June.
    8. Johnson, Daniel K N & Popp, David, 2003. "Forced Out of the Closet: The Impact of the American Inventors Protection Act on the Timing of Patent Disclosure," RAND Journal of Economics, The RAND Corporation, vol. 34(1), pages 96-112, Spring.
    9. Aoki, R. & Spiegel, Y., 1998. "Public Disclosure of Patent Applications, R&D, and Welfare," Papers 30-98, Tel Aviv.
    10. Kyle HIGHAM & NAGAOKA Sadao, 2022. "Language Barriers and the Speed of Knowledge Diffusion," Discussion papers 22074, Research Institute of Economy, Trade and Industry (RIETI).
    11. Yang, Deli, 2008. "Pendency and grant ratios of invention patents: A comparative study of the US and China," Research Policy, Elsevier, vol. 37(6-7), pages 1035-1046, July.

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    More about this item

    JEL classification:

    • F0 - International Economics - - General
    • K2 - Law and Economics - - Regulation and Business Law

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