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An Economic Analysis of Deferred Examination System: Evidence from Policy Reforms in Japan

Isamu Yamauchi and Sadao Nagaoka

No 14-05, IIR Working Paper from Institute of Innovation Research, Hitotsubashi University

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; fee structure; R&D (search for similar items in EconPapers)
JEL-codes: C41 L21 O34 (search for similar items in EconPapers)
Date: 2014-06
New Economics Papers: this item is included in nep-ino, nep-ipr and nep-pr~
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Journal Article: An economic analysis of deferred examination system: Evidence from a policy reform in Japan (2015) Downloads
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