Patent Office and Innovation Policy: Nobody's perfect

Bernard Caillaud () and Anne Duchene
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Bernard Caillaud: PSE - Paris-Jourdan Sciences Economiques - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: The number of patent applications and "bad" patents issued has been rising rapidly in recent years. Based on this trend, we study the overload problem within the Patent Office and its consequences on the firms' R&D incentives. We assume that the examination process of patent applications is imperfect, and that its quality is poorer under congestion. Depending on policy instruments such as submission fees and the toughness of the non-obviousness requirement, the system may result in a high-R&D equilibrium, in which firms self-select in their patent applications, or in an equilibrium with low R&D, opportunistic patent applications and the issuance of bad patents. Multiple equilibria often co-exist, which deeply undermines the effectiveness of policy instruments. We investigate the robustness of our conclusions as to how the value of patent protection is formalized, taking into consideration the introduction of a penalty system for rejected patent applications, as well as the role of commitment to a given patent protection policy.

Keywords: Patent Office; Patent quality; Congestion; Innovation (search for similar items in EconPapers)
Date: 2011-03
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Citations: View citations in EconPapers (12)

Published in International Journal of Industrial Organization, 2011, 29 (2), pp.242-252. ⟨10.1016/j.ijindorg.2010.06.002⟩

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Related works:
Journal Article: Patent office in innovation policy: Nobody's perfect (2011)
Working Paper: Patent Office and Innovation Policy: Nobody's perfect (2011)
Working Paper: Patent Office in innovation policy: Nobody's perfect (2009)
Working Paper: Patent Office in innovation policy: Nobody's perfect (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:pseptp:halshs-00754554

DOI: 10.1016/j.ijindorg.2010.06.002

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