Working Paper: CEPR ID: DP6565
Authors: Dietmar Harhoff; Karin Hoisl; Bettina Reichl; Bruno van Pottelsberghe de la Potterie
Abstract: One feature of the European patent system that is heavily criticized nowadays is related to its complex fragmentation and the induced cost burden for applicants. Once a patent is granted by the EPO, the assignee must validate (and often translate) it and pay the renewal fees to keep it in force in each country in which the applicant seeks protection. The objective of this paper is to assess to what extent validation and renewal fees as well as translation costs affect the validation behaviour of applicants. We rely on a gravity model that aims at explaining patent flows between inventor and target countries within the European patent system. The results show that the size of countries, their wealth and the distance between their capital cities are significant determinants of patent flows. Validation fees and renewal fees further affect the validation behaviour of applicants. Translation costs seem to have an impact as well. The important role played by fees suggests that the implementation of cost-reducing policy interventions like the London Protocol would induce a significant increase in the number of patents validated in each European country
Keywords: gravity model; patent fees; renewal fees; validation fees
JEL Codes: O30; O31; O38; O57
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| GDP per capita (applicant country) (O52) | validation flows (C52) |
| GDP per capita (validation country) (O57) | validation flows (C52) |
| Distance between countries (O57) | validation flows (C52) |
| Years of EPC membership (F36) | validation behaviour (C52) |
| Validation fees (C52) | validation behaviour (C52) |
| Renewal fees (Q21) | validation behaviour (C52) |
| Translation costs (F31) | validation behaviour (C52) |