The Hidden Value of Abandoned Applications to the Patent System
60 Pages Posted: 8 Oct 2019 Last revised: 27 Nov 2020
Date Written: June 13, 2020
Some inventors abandon their patent applications without ever receiving a patent. Although patent scholars view such abandoned patent applications as essentially worthless, we question that conventional wisdom. Conducting an empirical analysis of a recently released patent application dataset in light of a 1999 change that requires publication of most abandoned applications, we find that the United States Patent and Trademark Office (USPTO) often uses abandoned applications as “prior art” when examining future patent applications. Abandoned applications thus generate an “administrative disclosure” that prevents the issuance of broader patent rights to later applicants. By narrowing the scope of new patents, abandoned applications perform a public service in opening up more invention space to the public domain but do so at an enormous private cost to the abandonee — benefits and costs that have yet to be fully accounted for in the literature.
Keywords: patents, citations, value, abandoned, patent system, USPTO
JEL Classification: K10, K30
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