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Per un pugno di dollari: A first look at the price elasticity of patents
Gaétan de Rassenfosse & Bruno van Pottelsberghe de la Potterie
Oxford Review of Economic Policy, Volume 23, Issue 4, 2007, Pages 588-604
Abstract
This paper analyses the role of patent-filing fees requested by the member states of the European Patent Convention (EPC). We provide first empirical evidence showing that the fee elasticity of the demand for priority applications is negative and significant. Given the strong variation in absolute fees and in fees per capita across countries, this result indicates a suboptimal treatment of inventors across European countries and suggests that fees should be considered as an integral part of an intellectual property policy, especially in the current context of worrying backlogs. In addition, we show that the transfer rate of domestic priority filings to the European Patent Office (EPO) increases with the duration of membership to the EPO and the GDP per capita of a country, suggesting that member states experience a learning curve within the EPC. The high heterogeneity in the transfer rates casts some doubts on the practice that consists in relying on filings at the EPO or at the United States Patent and Trademark Office to assess the innovative performance of countries.
Keywords:
Fees; Patent filing; Price elasticity
JEL classification codes:
O30; O31; O38; O57
Links:
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Author's notes
This article:
- Observes that the patent costs vary significantly across member states of the European Patent Convention (EPC);
- Estimates that the price elasticity of demand for patents is about -0.5;
- Suggests that patent fees can be used as a policy tool to help reduce the number of patent applications;
- Observes that the transfer rate of national priority filings towards the EPO greatly differs across EPC countries;
- Shows that a country's duration as member of the EPC is a significant determinant of the number of patents transfered to the EPO, casting some doubts on the practice that consists in using EPO filings data to measure national innovative performances;
- Is one of the first to use the Patstat database (EPO Worldwide Patent Satistical Database);
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