Early Disclosure and Patent Value: How do you know that you are a pioneer?

While the patent system plays a dual role in promoting innovation through protection and disclosure, it is widely believed that the early disclosure of a patent application weakens patent protection by enhancing knowledge spillover. However, pre-grant publication enables early establishment of the invention’s priority, which enhances its appropriation. Using the introduction of pre-grant publications in Japan as a natural experiment, we find that early disclosure increased the rejection (and abandonment) of subsequent duplicative patent applications by others more than the grants of their follow-on patents. As a result, the patent value increased significantly on average. Consistently, pre-grant publications accelerated and increased the grant of one’s own follow-on inventions, more so when competition was significant. Thus, we find that pre-grant publications significantly promote appropriation through the early determination of the pioneer.