Why Don't Inventors Patent?

Petra Moser

No 13294, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper argues that the ability to keep innovations secret may be a key determinant of patenting. To test this hypothesis, the paper examines a newly-collected data set of more than 7,000 American and British innovations at four world's fairs between 1851 and 1915. Exhibition data show that the industry where an innovation is made is the single most important determinant of patenting. Urbanization, high innovative quality, and low costs of patenting also encourage patenting, but these influences are small compared with industry effects. If the effectiveness of secrecy is an important factor in inventors' patenting decisions, scientific breakthroughs, which facilitate reverse-engineering, should increase inventors' propensity to patent. The discovery of the periodic table in 1869 offers an opportunity to test this idea. Exhibition data show that patenting rates for chemical innovations increased substantially after the introduction of the periodic table, both over time and relative to other industries.

JEL-codes: D02 D21 D23 D62 K0 L1 L5 N0 N2 N21 N23 O3 O31 O34 O38 (search for similar items in EconPapers)
Date: 2007-08
New Economics Papers: this item is included in nep-ino, nep-ipr and nep-pr~
Note: DAE PR
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Citations: View citations in EconPapers (9)

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