Abstract

http://ssrn.com/abstract=2293225
 


 



Imperfect Information, Patent Publication, and the Market for Ideas


Deepak Hegde


New York University (NYU) - Leonard N. Stern School of Business

Hong Luo


Harvard Business School - Strategy Unit

August 31, 2013

Harvard Business School Strategy Unit Working Paper No. 14-019

Abstract:     
We investigate the role of an important information-disclosure mechanism — patent publication — in the market for ideas. We do so by analyzing the effects of the American Inventors Protection Act (AIPA), which required, as of November 29, 2000, that U.S. patent applications be published 18 months after their filing rather than at the time of patent grant. We develop a theoretical framework that yields predictions about the effects of AIPA on the timing of licensing, and test the predictions using a sample of 339 licenses of biomedical inventions protected by patent applications filed between 1995 and 2005. We find that post-AIPA patent applications experience a sharp increase in the probability of licensing after 18-month publication, and, on average, are licensed about 8.5 months sooner than pre-AIPA patent applications. Thus, information disclosure through patent publications appears to facilitate transactions in the market for ideas and significantly accelerate the commercialization of inventions.

Number of Pages in PDF File: 46

Keywords: Patents, Licensing, The American Inventor's Protection Act

JEL Classification: O31, O32, O34, O38

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Date posted: July 13, 2013 ; Last revised: September 4, 2013

Suggested Citation

Hegde, Deepak and Luo, Hong, Imperfect Information, Patent Publication, and the Market for Ideas (August 31, 2013). Harvard Business School Strategy Unit Working Paper No. 14-019. Available at SSRN: http://ssrn.com/abstract=2293225 or http://dx.doi.org/10.2139/ssrn.2293225

Contact Information

Deepak Hegde (Contact Author)
New York University (NYU) - Leonard N. Stern School of Business ( email )
44 West 4th Street
New York, NY NY 10012
United States

Hong Luo
Harvard Business School - Strategy Unit ( email )
Harvard Business School
Soldiers Field Road
Boston, MA 02163
United States
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