DP8338 Patent Office Governance and Patent System Quality

Author(s): Pierre M Picard, Bruno van Pottelsberghe de la Potterie
Publication Date: April 2011
Keyword(s): intellectual property, Patent system, public firm organization, quality
JEL(s): L30, O30, O31, O34, O38
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=8338

The present paper discusses the role of quality in patent systems from the perspective of patent offices' behavior and organization. After documenting original stylized facts, the paper presents a model in which patent offices set patent fees and the quality level of their examination processes. Various objectives of patent offices' governors are considered. We show that the quality of the patent system is maximal for the patent office that maximises either the social welfare or its own profit. Quality is lower for the self-funded patent office maximizing the number of patent applications and even smaller for the self-funded patent office maximizing the number of granted patents. A labor union improves examination quality and may compensate for the potentialy inappropriate objectives of patent office management.