The Consequences of Radical Patent-Regime Change

Alexander Donges and Felix Selgert

VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy from Verein für Socialpolitik / German Economic Association

Abstract: This paper analyzes the consequences of radical patent-regime change by exploiting a natural experiment: the forced adoption of the Prussian patent system in territories annexed after the Austro-Prussian War of 1866. Compared to other German states, Prussia granted patents more restrictively by setting higher novelty requirements. Though, patent fees were much lower. By using novel hand-collected data, we show that the forced adoption of the Prussian patent law caused a massive drop in the number of patents per capita in annexed territories. By contrast, we find a significantly positive effect of patent-regime change on world-fair exhibits per capita, which we use as a proxy for non-patented innovation. We interpret this finding as evidence that restricting the granting of patents, which creates more competition, is conducive for the generation of innovation.

Keywords: Innovation; Intellectual Property; Patents; Patent Law; Technological Change (search for similar items in EconPapers)
JEL-codes: D2 K11 L51 N0 O14 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc19:203662

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