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Subjective Performance of Patent Examiners, Implicit Contracts and Self-Funded Patent Offices

Corinne Langinier () and Philippe Marcoul ()

No 2018-14, Working Papers from University of Alberta, Department of Economics

Abstract: Self-funded patent offices should be concerned with patent quality (patents should be granted to only deserving innovations) and quantity (as revenues come from fees paid by applicants). In this context, we investigate what is the impact of the self-funded constraint on different bonus contracts, and how these contracts affect the examiners incentive to prosecute patent applications. We consider contracts in which a patent office offers bonuses on quantity quotas (explicit contract) and on quality outcome (either an implicit contract or an explicit contract based on a quality proxy). We find that a self-funded constrained agency should make different organization choices of incentives. For a low quality proxy precision, an agency facing a tight budget operates well with implicit contracts. However, by only relaxing moderately the budget constraint, the agency might be worse off simply because this will preclude implicit contracts. Only very large patenting fees might allow the agency to compensate for the loss of implicit contracts.

Keywords: Patents; Examiners; Explicit and Implicit Contracts; Self-funded Agency (search for similar items in EconPapers)
JEL-codes: D23 D86 O34 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta, nep-hrm, nep-ino, nep-ipr and nep-law
Date: 2018-10-18
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Journal Article: Subjective performance of patent examiners, implicit contracts, and self‐funded patent offices (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ris:albaec:2018_014

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