The Determinants of Patent Applications Outcomes - Does Experience Matter?

The aim of this paper is to study the determinants of the outcomes of patent applications (withdrawal, refusal or grant). The application process at the European Patent Office is modelled in three stages, using a Trivariate Probit model with double selectivity correction in order to test whether the applicants ?patenting history has an effect on the outcome of the current application. I investigate the behavior of the applicant after the patent office has established the "state of the art", a precondition to an invention being patentable. The main results are (i) firms with large patents portfolios act following a "trial and error" strategy, by applying for large numbers of patents and thereafter waiting for the patent office?s final decision when the expected probability of grant is high, (ii) the technological importance of a patent is a crucial determinant of a successful application grant, (iii) a withdrawal is to be regarded as an expected refusal, since applicants tend to withdraw their applications when there is evidence that the inventions cannot be considered to be novel or to involve an inventive step.