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The Failed Promise of User Fees: Empirical Evidence from the U.S. Patent and Trademark Office

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  • Michael D. Frakes
  • Melissa F. Wasserman

Abstract

In an attempt to shed light on the impact of user‐fee financing structures on the behavior of administrative agencies, we explore the relationship between the funding structure of the Patent and Trademark Office (PTO) and its examination practices. We suggest that the PTO's reliance on prior grantees to subsidize current applicants exposes the PTO to a risk that its obligatory costs will surpass incoming fee collections. When such risks materialize, we hypothesize, and thereafter document, that the PTO will restore financial balance by extending preferential examination treatment—that is, higher granting propensities and/or shorter wait times—to some technologies over others.

Suggested Citation

  • Michael D. Frakes & Melissa F. Wasserman, 2014. "The Failed Promise of User Fees: Empirical Evidence from the U.S. Patent and Trademark Office," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 11(4), pages 602-636, December.
    • Handle: RePEc:wly:empleg:v:11:y:2014:i:4:p:602-636
    DOI: 10.1111/jels.12051
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    References listed on IDEAS

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    Cited by:

    1. Lei, Zhen & Wright, Brian D., 2017. "Why weak patents? Testing the examiner ignorance hypothesis," Journal of Public Economics, Elsevier, vol. 148(C), pages 43-56.
    2. deGrazia, Charles A.W. & Pairolero, Nicholas A. & Teodorescu, Mike H.M., 2021. "Examination incentives, learning, and patent office outcomes: The use of examiner’s amendments at the USPTO," Research Policy, Elsevier, vol. 50(10).
    3. Marco, Alan C. & Sarnoff, Joshua D. & deGrazia, Charles A.W., 2019. "Patent claims and patent scope," Research Policy, Elsevier, vol. 48(9), pages 1-1.
    4. Haoyang Song & Jianhua Hou & Yang Zhang, 2022. "Patent protection: does it promote or inhibit the patented technological knowledge diffusion?," Scientometrics, Springer;Akadémiai Kiadó, vol. 127(5), pages 2351-2379, May.
    5. Manuel Adelino & Katharina Lewellen & W. Ben McCartney, 2022. "Hospital Financial Health and Clinical Choices: Evidence from the Financial Crisis," Management Science, INFORMS, vol. 68(3), pages 2098-2119, March.

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