DP11688 Screening for Patent Quality: Examination, Fees and the Courts

Author(s): Mark Schankerman, Florian Schuett
Publication Date: December 2016
Date Revised: March 2017
Keyword(s): courts, innovation, litigation, patent fees, patents, screening
JEL(s): D82, K41, L24, O31, O34, O38
Programme Areas: Industrial Organization
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=11688

To study how governments can improve the quality of patent screening, we develop an integrative framework incorporating four main policy instruments: patent office examination, pre- and post-grant fees, and challenges in the courts. We show that examination and pre-grant fees are complementary, and that pre-grant fees screen more effectively than post-grant fees. Simulations of the model, calibrated on U.S. patent and litigation data, indicate that patenting is socially excessive and the patent office does not effectively weed out low-quality applications. We quantify the welfare effects of counterfactual policy reforms and show how theydepend on the quality of the courts.