Max Planck Institute for Innovation and Competition, Munich, Room 313
The European patent system consists of national offices and the European Patent Office (EPO), which cooperate on legal questions, while competing on fees and service quality. This competition could result in differentiation of the service offered by offices and in market segmentation, which might benefit patent applicants. To date there is little evidence on whether firms regularly choose between EPO and national offices, nor which parameters influence this choice. Such evidence is needed, if the functioning of the EPS as a whole is to be assessed. We provide the first analysis of competition between patent offices within the EPS. The paper provides a recursive model of the two principal choices made by patent applicants in the EPS: the selection of examining offices and of jurisdictions in which patent protection is obtained. We then derive and estimate instrumental variables models to establish the relative importance of fees, grant rates, examination duration and firm and patent characteristics in these choices. We identify sectors and types of firms that predominantly rely on the national offices or the EPO, but we also identify significant levels of switching, driven by variation in grant rates across offices and by fee changes as well as variation in the duration of examination. We discuss implications of our work for theoretical and empirical analyses of patent systems, and we discuss how the likely introduction of a Unitary Patent and Unified Patent Court will affect the system and its governance mechanisms.
Contact Person: Dr. Fabian Gaessler