From Data to Insights: Public Data Visualization and Small Entity Patent Disparity

Abstract

We examine how reducing information processing capacity affects innovation outcomes for small entities. Small entities are twice as likely to abandon their patent applications compared to large entities. We test the hypothesis that this disparity stems from small entities' limited capacity to process complex information about USPTO patent examiners by exploiting the introduction of a platform aggregating publicly available data into pictographic summary statistics of patent examiner leniency. We find the platform narrows the abandonment gap on average, but more specifically, abandonment differentially increases with harsher examiners and decreases with more lenient ones. The decrease is more pronounced in applications with greater ex-ante information disparity and where revisions tend to be less costly. This results in more patent grants to small entities without noticeable changes in the behaviors of large entities. Our findings suggest that user-friendly provision of public information can reduce information disadvantages faced by smaller entities.

Keywords: Online Platforms, Technology, information processing costs, patenting

JEL Classification: O34, O38, L26, D83