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Why Don't Inventors Patent?

50 Pages Posted: 9 Aug 2007  

Petra Moser

Leonard N. Stern School of Business - Department of Economics; National Bureau of Economic Research (NBER)

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Date Written: August 2007

Abstract

This paper argues that the ability to keep innovations secret may be a key determinant of patenting. To test this hypothesis, the paper examines a newly-collected data set of more than 7,000 American and British innovations at four world's fairs between 1851 and 1915. Exhibition data show that the industry where an innovation is made is the single most important determinant of patenting. Urbanization, high innovative quality, and low costs of patenting also encourage patenting, but these influences are small compared with industry effects. If the effectiveness of secrecy is an important factor in inventors' patenting decisions, scientific breakthroughs, which facilitate reverse-engineering, should increase inventors' propensity to patent. The discovery of the periodic table in 1869 offers an opportunity to test this idea. Exhibition data show that patenting rates for chemical innovations increased substantially after the introduction of the periodic table, both over time and relative to other industries.

JEL Classification: D02,D21,D23,D62,K0,L1,L5,N0,N2,N21,N23,O3,O31,O34

Suggested Citation

Moser, Petra, Why Don't Inventors Patent? (August 2007). NBER Working Paper No. W13294. Available at SSRN: https://ssrn.com/abstract=1005607

Petra Moser (Contact Author)

Leonard N. Stern School of Business - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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