The course I teach at Wharton has an IP component, which in turn has a patent component, which in turn has me trying to explain to skeptical would-be entrepreneurs why one would possibly want to have a world in which people can invent something, not file for patents, and still defeat patent holders in litigation based on the first-to-invent doctrine. Next week, Congress will be voting on whether to change the US's first-to-invent rule to match the rest of the world's first-to-file rule, and my colleagues on the other side of the unversity, David Abrams and Polk Wagner, have done a study on whether the change would be a good idea. As Polk observed over on Patently-O, "the results do reveal that, contrary to the conventional wisdom, a change to first-to-file ... is likely to result in reduced patenting behavior by individual inventors."
That's quite a policy-relevant take away, on quite a big potential change in patent law. Congress may find it quite interesting - although it could be that they feel constrained by international harmonization impulses to change to first to file anyway. At any rate, the paper's up on SSRN, here's the abstract:
Even as as we stand on the cusp of the broadest set of changes to the US Patent Law in two generations, virtually no empirical analysis has been conducted on the impact of the primary components of the proposed reforms. Until now. In this paper we investigate the expected effects on patenting behavior of the major change in the America Invents Act of 2011: a shift in the patent priority rules from the US’s traditional “first-to-invent” system to the dominant “first-to-file” system. This is a deeply controversial change: Opponents argue that first-to-file disadvantages small inventors and leads to lower quality patents. Those in favor emphasize administrative simplicity and the cost savings of first-to-file. While there has been some theoretical work on this topic, we use the Canadian experience with the same change the US is considering as a natural experiment to shed the first empirical light on the question.
Our analysis uses a difference-in-difference framework to estimate the impact of the Canadian law change on small inventors. Using data on all patents granted by the Canadian Intellectual Property Office and the US Patent and Trademark Office, we find a significant drop in the fraction of patents granted to small inventors in Canada coincident with the implementation of first-to-file. We also find no measurable changes in patent quality. The results are robust to several different specification checks. While the net welfare impact that can be expected from a shift to first-to-file is unclear, our results do reveal that, contrary to the conventional wisdom, the rule change is not free — it is likely to result in reduced patenting behavior by individual inventors.
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