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Discussion Paper Details

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Title: On the price elasticity of demand for patents

Author(s): Gaétan de Rassenfosse and Bruno van Pottelsberghe de la Potterie

Publication Date: November 2008

Keyword(s): patent cost, patent systems, patenting fees, price elasticity and propensity to patent

Programme Area(s): Industrial Organization

Abstract: This paper investigates whether patent fee policies are a potential factor underlying the boom in patent applications observed in major patent offices. We provide the first panel-based evidence suggesting that fees affect the demand for patents in three major patent offices (EPO, USPTO and JPO), with a price elasticity of about -0.4 (similar to that of the residential demand for oil or water). The laxity of fee policies adopted by patent offices over the past 25 years therefore contributed, to a significant extent, to the rising propensity to patent observed since the mid-nineties. This is especially true at the European Patent Office, which has dramatically decreased its fees since the mid-1990s.

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Bibliographic Reference

de Rassenfosse, G and van Pottelsberghe de la Potterie, B. 2008. 'On the price elasticity of demand for patents'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7029