Max Planck Institute for Innovation and Competition, Munich, Room 313
The European patent system consists of national ofﬁces and the European Patent Ofﬁce (EPO), which cooperate on legal questions, while competing on fees and service quality. This competition could result in differentiation of the service offered by ofﬁces and in market segmentation, which might beneﬁt patent applicants. To date there is little evidence on whether ﬁrms regularly choose between EPO and national ofﬁces, nor which parameters inﬂuence this choice. Such evidence is needed, if the functioning of the EPS as a whole is to be assessed. We provide the ﬁrst analysis of competition between patent ofﬁces within the EPS. The paper provides a recursive model of the two principal choices made by patent applicants in the EPS: the selection of examining ofﬁces and of jurisdictions in which patent protection is obtained. We then derive and estimate instrumental variables models to establish the relative importance of fees, grant rates, examination duration and ﬁrm and patent characteristics in these choices. We identify sectors and types of ﬁrms that predominantly rely on the national ofﬁces or the EPO, but we also identify signiﬁcant levels of switching, driven by variation in grant rates across ofﬁces and by fee changes as well as variation in the duration of examination. We discuss implications of our work for theoretical and empirical analyses of patent systems, and we discuss how the likely introduction of a Unitary Patent and Uniﬁed Patent Court will affect the system and its governance mechanisms.
Contact Person: Dr. Fabian Gaessler