Patent Publication and Innovation

Deepak Hegde, Kyle Herkenhoff and Chenqi Zhu

No 29770, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: How does the publication of patents affect innovation? We answer this question by exploiting a large-scale natural experiment—the passage of the American Inventor's Protection Act of 1999 (AIPA)—that accelerated the public disclosure of most U.S. patents by two years. We obtain causal estimates by comparing U.S. patents subject to the law change with “twin” European patents which were not. After AIPA's enactment, U.S. patents receive more and faster follow-on citations, indicating an increase in technology diffusion. Technological overlap increases between distant but related patents and decreases between highly similar patents, and patent applications are less likely to be abandoned post-AIPA, suggesting a reduction in duplicative R&D. Firms exposed to one standard deviation longer patent grant delays increased their R&D investment by 4% after AIPA. These findings are consistent with our theoretical framework in which AIPA provisions news shocks about related technologies to follow-on inventors and thus alters their innovation decisions.

JEL-codes: D23 E02 G24 L26 O34 (search for similar items in EconPapers)
Date: 2022-02
New Economics Papers: this item is included in nep-ban, nep-ind, nep-ino, nep-ipr, nep-mac, nep-reg, nep-sbm and nep-tid
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Citations: View citations in EconPapers (5)

Published as Deepak Hegde & Kyle Herkenhoff & Chenqi Zhu, 2023. "Patent Publication and Innovation," Journal of Political Economy, vol 131(7), pages 1845-1903.

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