Patent Screening, Innovation, and Welfare

Mark Schankerman and Florian Schuett

No 15301, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Critics claim that patent screening is ineffective, granting low-quality patents that impose unnecessary social costs. We develop an integrated framework, involving patent office examination, fees, and endogenous validity challenges in the courts, to study patent screening both theoretically and quantitatively. In our model, some inventions require the patent incentive while others do not, and asymmetric information creates a need for screening. We show that the endogeneity of challenges implies that courts, even if perfect, cannot solve the screening problem. Simulations of the model, calibrated on U.S. data, indicate that screening is highly imperfect, with almost half of all patents issued on inventions that do not require the patent incentive. While we find that the current patent system generates positive social value, intensifying examination would yield large welfare gains. The social value of the patent system would also be larger if complemented by antitrust limits on licensing.

Keywords: Innovation; Patent quality; Screening; Litigation; Courts; Patent fees; Licensing (search for similar items in EconPapers)
JEL-codes: D82 K41 L24 O31 O34 O38 (search for similar items in EconPapers)
Date: 2020-11
New Economics Papers: this item is included in nep-com, nep-ino, nep-ipr and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP15301 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Patent Screening, Innovation, and Welfare (2022)
Working Paper: Patent screening, innovation, and welfare (2022)
Working Paper: Patent Screening, Innovation, and Welfare (2020)
Working Paper: Patent Screening, Innovation, and Welfare (2020)
Working Paper: Patent Screening, Innovation, and Welfare (2020)
Working Paper: Patent Screening, Innovation, and Welfare (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:15301

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP15301

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().