Discrimination against foreigners in the U.S. patent system

"Each Member shall accord to the nationals of other Members treatment no less favorable than that it accords to its own nationals with regard to the protection of intellectual property […]”.

TRIPS Agreement, Article 3.1.

Abstract

Inventions of foreign origin are about ten percentage points less likely to be granted a U.S. patent than domestic inventions. An empirical analysis of 1.5 million U.S. patent applications identifies three systematic differences between foreign and domestic patent applications that partly explain this bias. They include differences in patent agents, the financial resources of the applicants, and the level of effort that applicants put into the prosecution process. We find no evidence of disparate treatment (‘intentional discrimination’) of foreigners. Instead, our evidence points to a disparate impact (‘unintentional discrimination’) of the U.S. patent system on foreign inventors. Our results suggest unequal access to the patent system for foreigners compared to locals (but also for small U.S. firms). Giving examiners the power of (truly) rejecting a patent application may be one solution to level the playing field between foreigners and locals, but also between large and small firms.

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Acknowledgment

The authors are grateful to Andy Toole as well as three anonymous referees for useful comments.

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Correspondence to Gaétan de Rassenfosse.

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Accepted by Suma Athreye, Area Editor, 15 May 2020. This article has been with the authors for two revisions.

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de Rassenfosse, G., Hosseini, R. Discrimination against foreigners in the U.S. patent system. J Int Bus Policy 3, 349–366 (2020). https://doi.org/10.1057/s42214-020-00058-6

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Keywords

  • foreign bias
  • discrimination
  • disparate impact
  • national treatment principle
  • patent system