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An economic analysis of deferred examination system: Evidence from a policy reform in Japan

Isamu Yamauchi and Sadao Nagaoka

International Journal of Industrial Organization, 2015, vol. 39, issue C, 19-28

Abstract: We investigate how a deferred patent examination system promotes ex-ante screening of patent applications, which reduces both the number of granted patents and the use of economic resources for examinations, without reducing the return from R&D. Based on a real option theory, we develop a model of examination request behaviors. Exploiting the responses of Japanese firms to recent policy reform, we find that the shortening of the allowable period for an examination request significantly increases both eventual and early requests, controlling for the blocking use of a pending patent application. This effect is stronger in technology areas with higher uncertainty. These results support the importance of uncertainty for an applicant and of ex-ante screening.

Keywords: Patent; Examination; Option value; R&D (search for similar items in EconPapers)
JEL-codes: C41 L21 O34 (search for similar items in EconPapers)
Date: 2015
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Working Paper: An Economic Analysis of Deferred Examination System: Evidence from Policy Reforms in Japan (2014) Downloads
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DOI: 10.1016/j.ijindorg.2015.01.003

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