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An Economic Analysis of Deferred Examination System: Evidence from Policy Reforms in Japan

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  • Yamauchi, Isamu
  • Nagaoka, Sadao
  • 長岡, 貞男

Abstract

We investigate how a deferred patent examination system promotes ex-ante screening of patent applications, which reduces both the number of granted patents and the use of economic resources for examinations, without reducing the return from R&D. Based on a real option theory, we develop a model of examination request behaviors. Exploiting the responses of Japanese firms to recent policy reform, we find that the shortening of the allowable period for an examination request significantly increases both eventual and early requests, controlling for the blocking use of a pending patent application. This effect is stronger in technology areas with higher uncertainty. These results support the importance of uncertainty for an applicant and of ex-ante screening.

Suggested Citation

  • Yamauchi, Isamu & Nagaoka, Sadao & 長岡, 貞男, 2014. "An Economic Analysis of Deferred Examination System: Evidence from Policy Reforms in Japan," IIR Working Paper 14-05, Institute of Innovation Research, Hitotsubashi University.
    • Handle: RePEc:hit:iirwps:14-05
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    Cited by:

    1. Luis Gil Abinader, 2020. "Pharmaceutical patent examination outcomes in the Dominican Republic," Journal of International Business Policy, Palgrave Macmillan, vol. 3(4), pages 385-407, December.
    2. Sampat, Bhaven N. & Shadlen, Kenneth C., 2017. "Secondary pharmaceutical patenting: A global perspective," Research Policy, Elsevier, vol. 46(3), pages 693-707.
    3. NAGAOKA Sadao & YAMAUCHI Isamu, 2017. "Information Constraint of the Patent Office and Examination Quality: Evidence from the effects of initiation lags," Discussion papers 17040, Research Institute of Economy, Trade and Industry (RIETI).
    4. Drivas, Kyriakos & Kaplanis, Ioannis, 2020. "The role of international collaborations in securing the patent grant," Journal of Informetrics, Elsevier, vol. 14(4).
    5. Zhang, Gupeng & Xiong, Libin & Duan, Hongbo & Huang, Dujuan, 2020. "Obtaining certainty vs. creating uncertainty: Does firms’ patent filing strategy work as expected?," Technological Forecasting and Social Change, Elsevier, vol. 160(C).
    6. Yamauchi, Isamu & Nagaoka, Sadao, 2015. "Does the outsourcing of prior art search increase the efficiency of patent examination? Evidence from Japan," Research Policy, Elsevier, vol. 44(8), pages 1601-1614.
    7. Nobuaki Yamashita & Isamu Yamauchi, 2020. "Innovation responses of Japanese firms to Chinese import competition," The World Economy, Wiley Blackwell, vol. 43(1), pages 60-80, January.
    8. Zhu, Kejia & Malhotra, Shavin & Li, Yaohan, 2022. "Technological diversity of patent applications and decision pendency," Research Policy, Elsevier, vol. 51(1).
    9. Nagaoka, Sadao & Yamauchi, Isamu, 2022. "Information constraints and examination quality in patent offices: The effect of initiation lags," International Journal of Industrial Organization, Elsevier, vol. 82(C).
    10. YAMASHITA Nobuaki & YAMAUCHI Isamu, 2019. "Effects of Offshore Production and R&D on Domestic Innovation Activities," Discussion papers 19068, Research Institute of Economy, Trade and Industry (RIETI).
    11. Bhaven N Sampat & Kenneth C Shadlen, 2018. "Indian pharmaceutical patent prosecution: The changing role of Section 3(d)," PLOS ONE, Public Library of Science, vol. 13(4), pages 1-19, April.

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    More about this item

    Keywords

    patent; examination; option value; fee structure; R&D;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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