DP16715 On the Interaction between Patent Screening and its Enforcement
|Author(s):||Gerard Llobet, Álvaro Parra, Javier Suarez|
|Publication Date:||November 2021|
|Keyword(s):||Imitation, industry dynamics, Innovation, Intellectual Property, Patent Enforcement, Patent Screening|
|JEL(s):||L26, O31, O34|
|Programme Areas:||Industrial Organization|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=16715|
This paper explores the interplay between patent screening and patent enforcement. Costly enforcement involves type I and type II errors. When the patent office takes the rates at which such errors occur as given, granting some invalid patents is socially optimal even in the absence of screening costs because it encourages innovation. When the influence on courts' enforcement effort is considered, these same forces imply that screening and enforcement are complementary. This means that, contrary to common wisdom, better screening induces better enforcement but also that an increase in enforcement costs could be optimally accommodated with less rather than more ex-ante screening.