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Monetary and implicit incentives of patent examiners

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  • Langinier, Corinne
  • Marcoul, Philippe

Abstract

Often accused of granting questionable patents, examiners might lack proper incentives to carefully scrutinize patent applications. We analyze their examination and granting behavior in the presence of different incentive schemes that reward examiners based on rejected and/or accepted patents. Our findings suggest that, for a given probability of random audit by the PTO, a dual regime (based on both accepted and rejected patents) does not provide more incentive than a salary based on rejected patents. An optimal probability of random audit chosen by the PTO is often too high compared to the first best, while the examiner chooses a suboptimal examination effort's level. Lastly, we study the effect of career concerns on the granting behavior of examiners. We find that monetary and implicit incentives induce patent examiners to intensify their search effort. Furthermore, a marginal increase of the random audit might reduce examiners’ effort in the presence of career concerns.

Suggested Citation

  • Langinier, Corinne & Marcoul, Philippe, 2020. "Monetary and implicit incentives of patent examiners," Journal of Economics and Business, Elsevier, vol. 110(C).
    • Handle: RePEc:eee:jebusi:v:110:y:2020:i:c:s0148619519303078
    DOI: 10.1016/j.jeconbus.2020.105906
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    Cited by:

    1. Fabian Gaessler & Dietmar Harhoff & Stefan Sorg & Georg von Graevenitz, 2024. "Patents, Freedom to Operate, and Follow-on Innovation: Evidence from Post-Grant Opposition," Rationality and Competition Discussion Paper Series 494, CRC TRR 190 Rationality and Competition.
    2. Amir, Rabah & Encaoua, David & Lefouili, Yassine, 2014. "Optimal licensing of uncertain patents in the shadow of litigation," Games and Economic Behavior, Elsevier, vol. 88(C), pages 320-338.
    3. de Saint-Georges, Matthis & van Pottelsberghe de la Potterie, Bruno, 2013. "A quality index for patent systems," Research Policy, Elsevier, vol. 42(3), pages 704-719.
    4. Andrew Eckert & Corinne Langinier, 2014. "A Survey Of The Economics Of Patent Systems And Procedures," Journal of Economic Surveys, Wiley Blackwell, vol. 28(5), pages 996-1015, December.
    5. Vidya Atal & Talia Bar, 2014. "Patent Quality and a Two-Tiered Patent System," Journal of Industrial Economics, Wiley Blackwell, vol. 62(3), pages 503-540, September.
    6. Kim, Yee Kyoung & Oh, Jun Byoung, 2017. "Examination workloads, grant decision bias and examination quality of patent office," Research Policy, Elsevier, vol. 46(5), pages 1005-1019.

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    More about this item

    Keywords

    Patent examiners; Career concerns;

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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