Working Paper: CEPR ID: DP6178
Authors: Pierre Rgibeau; Katharine Rockett
Abstract: Innovative activities often are heavily regulated. Reviews conducted by administrative agencies take time and are not perfectly accurate. Of particular concern is whether, by design or not, such agencies discriminate against more important innovations by taking more time to perform their reviews. We study the relationship between the length of patent review and the importance of inventions in a theoretical model. We build a simple model of the US patent review process. The model predicts that, controlling for a patent's position in the new technology cycle, more important innovations would (and should) be approved more quickly. Also, the approval delay is likely to decrease as an industry moves from the early stages of an innovation cycle to later stages. These predictions are in line with the evidence we obtain from a data set of US patents granted in the field of genetically modified crops from 1983 to 1999. Our analysis also helps to reconcile the results on the relationship between importance and delay found in previous studies.
Keywords: Genetic Modification; Innovation; Patent Policy; Regulation
JEL Codes: L43; O31; O32; O33; O34; O38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| patent's position in the technology cycle (O30) | approval delay (G22) |
| importance of innovations (O35) | approval delay (G22) |
| innovation cycle stage (O36) | approval delay (G22) |