Patent Continuations, Product Lifecycle Contraction and the Patent Scope Erosion - A New Insight into Patenting Trends

Abstract:     
This study was initiated in order to provide more factual insight into the recent debates on patent reforms in general and more particularly, the practice of patent continuations in the United States Patent and Trademark Office ("USPTO"). Several important trends that have not been previously quantified are brought to light. A quantitative analysis of various components of the flow of patent applications to the USPTO was carried out and insight into the ever-increasing propensity of patentees to file patent applications is presented. It is shown that with the exception of isolated transients due to patent law changes, the growth trend in each component of the number of patent applications is exponential in time. Original patent applications disclosing new inventions are shown to grow at a doubling rate of 14 years, a rate similar to that of the general growth of science. In contrast, continuation applications are shown to grow more rapidly at a rate proportional to that of new product introductions, doubling every 6.5 years. It is shown that such growth trends have persisted over the last quarter of a century. The continuation application growth trend is very likely a direct result of historical product life cycle reduction and the exponential growth in new product introductions, necessitating new or amended patent claims. In addition, evidence is presented that the product lifecycle reduction over time results in the grant of patents with progressively diminishing claim scope. This study shows that due to such acceleration of claim obsolescence and scope reduction, patent continuations at the USPTO is essential for applicants who seek to appropriate equivalent returns from their inventions. A critical discussion of other recent theories that attempted to explain patent continuations and the surge in patenting is also provided.

Keywords: patent applications, patent continuations, patent breadth, patent litigation statistics, product cycle, technology cycle

JEL Classifications: C1, C5, O31, O34

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