Perception Pending: What Do Patents Signal to Consumers?

39 Pages Posted: 14 Jun 2023 Last revised: 20 Feb 2024

See all articles by Alexander Billy

Alexander Billy

Ankura Consulting, LLC; Free Our Vote

Neel U. Sukhatme

Georgetown University Law Center; Georgetown McCourt School of Public Policy

Date Written: June 6, 2023

Abstract

Patent law encourages inventors to label their products as "patented," to mark their legal status and potentially secure monetary damages from infringing competitors. In this paper, we empirically examine whether such labels might have a separate and direct impact on consumers, by affecting how they view patented products and influencing their purchasing behavior.

We develop and conduct two experiments to isolate the impact of patent status on consumer behavior. In the first study, an online randomized experiment, we demonstrate how increasing the salience of patent status heightens consumers' beliefs that products are innovative and of high quality. We also reveal consumers’ surprisingly sophisticated understanding of the patent process and what being patented means. Despite this informed perspective, consumers are not more inclined to buy patented products.

To determine if these results hold in a real-world setting, we conduct a field experiment at a small retail pharmacy chain. Using scanner data spanning over five years, we find no evidence consumers respond to increased patent salience. Our collective results suggest that while consumers view patented products as more innovative and of higher quality, these positive attributes do not necessarily translate into heightened purchasing behavior.

Keywords: Innovation, Patent, Salience, Patent Salience, Field Experiment, Online Experiment, Mechanical Turk

JEL Classification: K1, O31

Suggested Citation

Billy, Alexander and Sukhatme, Neel U., Perception Pending: What Do Patents Signal to Consumers? (June 6, 2023). Available at SSRN: https://ssrn.com/abstract=4471087 or http://dx.doi.org/10.2139/ssrn.4471087

Alexander Billy (Contact Author)

Ankura Consulting, LLC ( email )

New York, NY
United States
7246894413 (Phone)

HOME PAGE: http://https://sites.google.com/georgetown.edu/alexanderbilly/home

Free Our Vote ( email )

HOME PAGE: http://freeourvote.com

Neel U. Sukhatme

Georgetown University Law Center ( email )

600 New Jersey Avenue, NW
Washington, DC 20001
United States

Georgetown McCourt School of Public Policy ( email )

Old North, Suite 100
37th & O Streets NW
Washington, DC 20057
United States

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