Patent Publication and Innovation / Deepak Hegde, Kyle F. Herkenhoff, Chenqi Zhu.

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Hegde, Deepak

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w29770.Publication details: Cambridge, Mass. National Bureau of Economic Research 2022.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: How does the publication of patents affect innovation? We answer this question by exploiting a large-scale natural experiment--the passage of the American Inventor's Protection Act of 1999 (AIPA)--that accelerated the public disclosure of most U.S. patents by two years. We obtain causal estimates by comparing U.S. patents subject to the law change with "twin" European patents which were not. After AIPA's enactment, U.S. patents receive more and faster follow-on citations, indicating an increase in technology diffusion. Technological overlap increases between distant but related patents and decreases between highly similar patents, and patent applications are less likely to be abandoned post-AIPA, suggesting a reduction in duplicative R&D. Firms exposed to one standard deviation longer patent grant delays increased their R&D investment by 4% after AIPA. These findings are consistent with our theoretical framework in which AIPA provisions news shocks about related technologies to follow-on inventors and thus alters their innovation decisions.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w29770 (Browse shelf(Opens below))	Not For Loan

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February 2022.

How does the publication of patents affect innovation? We answer this question by exploiting a large-scale natural experiment--the passage of the American Inventor's Protection Act of 1999 (AIPA)--that accelerated the public disclosure of most U.S. patents by two years. We obtain causal estimates by comparing U.S. patents subject to the law change with "twin" European patents which were not. After AIPA's enactment, U.S. patents receive more and faster follow-on citations, indicating an increase in technology diffusion. Technological overlap increases between distant but related patents and decreases between highly similar patents, and patent applications are less likely to be abandoned post-AIPA, suggesting a reduction in duplicative R&D. Firms exposed to one standard deviation longer patent grant delays increased their R&D investment by 4% after AIPA. These findings are consistent with our theoretical framework in which AIPA provisions news shocks about related technologies to follow-on inventors and thus alters their innovation decisions.