Quick or Broad Patents?

67 Pages Posted: 8 Mar 2020 Last revised: 28 May 2020

See all articles by Deepak Hegde

Deepak Hegde

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

Alexander Ljungqvist

Stockholm School of Economics; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Research Institute of Industrial Economics (IFN)

Manav Raj

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

Date Written: April 23, 2020

Abstract

We provide causal evidence of the effects of patent scope and review times on startups and externalities on their rivals. We leverage the quasi-random assignment of patent applications to examiners and unique data on all first-time applications filed at the U.S. Patent and Trademark Office since 2001. We find that patent grant delays reduce a startup’s employment and sales growth, its chances of survival, and the quantity and quality of its future innovation. Delays harm both the startup’s and its rivals’ access to external capital, suggesting that quick patents enhance both inventor rewards and generate positive externalities for rivals. Broader scope has nuanced effects. It increases a startup’s future growth (conditional on survival) and its follow-on innovation but imposes negative externalities on its rivals’ subsequent innovation.

Keywords: Patents, innovation, scope, entrepreneurship, venture capital

JEL Classification: D23, G24, L26, O34

Suggested Citation

Hegde, Deepak and Ljungqvist, Alexander and Raj, Manav, Quick or Broad Patents? (April 23, 2020). NYU Stern School of Business, Available at SSRN: https://ssrn.com/abstract=3511268 or http://dx.doi.org/10.2139/ssrn.3511268

Deepak Hegde (Contact Author)

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

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Alexander Ljungqvist

Stockholm School of Economics ( email )

111 60 Stockholm
Sweden

Centre for Economic Policy Research (CEPR)

London
United Kingdom

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Manav Raj

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

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
122
Abstract Views
1,170
rank
252,513
PlumX Metrics