The Cost Factor in Patent Systems
The objective of this paper is to assess to what extent the cost of patenting affects the demand for patents. The empirical analysis, which focuses on the patent systems of the USA, Japan, and Europe in 2003, leads to the following methodological and empirical conclusions: (1) for a proper international comparison, the size of the market and the average number of claims included in a patent must be accounted for; (2) when the cost per claim per capita (the 3C-index) is considered, a negative linear relationship appears between the cost of patenting and the number of claims that are filed; (3) after the grant of a patent by the EPO, the translation, validation and transaction costs induced by an effective protection in several European countries witness a highly fragmented and very expensive European market for intellectual property; (4) for a patent designating 13 European countries, the 3C-index is about ten (two) times higher than in the US (Japanese) system (for process and translation costs up to the grant); (5) The European market being more than twice as large as the US market in terms of inhabitants, the 3C-index suggests that there would be a clear justification for higher nominal examination fees at the EPO, that would ensure the pursuit of a rigorous granting process.
Keywordspatents cost elasticity cost per claim per capita patent systems patent fees
JEL ClassificationP14 P51 O34
Earlier versions of this paper have been presented at the AEA Conference “Innovations and Intellectual Property”, 20–21 of October, 2005, in Paris; at the CESPRI seminar of the Bocconi University (22nd of February, 2006); at the Bocconi conference “Intellectual Property: a key tool for European competitiveness” (23rd of February, 2005). We would like to thank all the participants and more particularly, Gaétan de Rassenfosse, Wolfram Förster, Alfonso Gambardella, Dominique Guellec, Karin Hoisl, Laurent Manderieux, Fabio Montobbio, Marc Nicolas, Bettina Reichl, Henri Serbat, Nicolas van Zeebroeck and three anonymous referees for their constructive remarks.
This paper was partly written when Bruno van Pottelsberghe was Chief Economist of the European Patent Office. The views expressed in this article are purely those of the authors and may not in any circumstances be regarded as stating an official position of the EPO or of the ULB.
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