DP6565 Patent Validation at the Country Level - The Role of Fees and Translation costs

Author(s): Dietmar Harhoff, Karin Hoisl, Bettina Reichl, Bruno van Pottelsberghe de la Potterie
Publication Date: November 2007
Keyword(s): gravity model, patent fees, renewal fees, validation fees
JEL(s): O30, O31, O38, O57
Programme Areas: Industrial Organization
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=6565

One feature of the European patent system that is heavily criticized nowadays is related to its complex fragmentation and the induced cost burden for applicants. Once a patent is granted by the EPO, the assignee must validate (and often translate) it and pay the renewal fees to keep it in force in each country in which the applicant seeks protection. The objective of this paper is to assess to what extent validation and renewal fees as well as translation costs affect the validation behaviour of applicants. We rely on a gravity model that aims at explaining patent flows between inventor and target countries within the European patent system. The results show that the size of countries, their wealth and the distance between their capital cities are significant determinants of patent flows. Validation fees and renewal fees further affect the validation behaviour of applicants. Translation costs seem to have an impact as well. The important role played by fees suggests that the implementation of cost-reducing policy interventions like the London Protocol would induce a significant increase in the number of patents validated in each European country.