Public Disclosure of Patent Applications, R&D, and Welfare
Berglas School of Economics Working Paper 30-98
50 Pages Posted: 27 Jan 1999
Date Written: December 1998
In Europe and in Japan, patent applications are publicly disclosed after 18 month from the filing date regardless of whether a patent has been or will be registered. In the U.S. in contrast, patent applications are publicly disclosed only when a patent is granted. In this paper we examine the consequences of this difference for (i) firm's R&D and patenting behavior, (ii) consumers' surplus and social welfare, and (iii) the incentives of firms to innovate, in a setting where patent protection is imperfect in the sense that patent applications may be rejected and patents are not always upheld in court. The main conclusions are that public disclosure leads to fewer patent applications and fewer innovations, but for a given number of innovations, it raises the probability that new technologies will reach the product market and thereby enhances consumers' surplus and possibly total welfare as well.
JEL Classification: O34, O31
Suggested Citation: Suggested Citation