The Impact Gap: Has Chinese Science Caught up to the Frontier?
Fiona Murray (MIT) with Yasheng Huang (MIT) and Valerie Kuo
In this paper we examine the gap in citations – the impact gap – for chinese science compared to scientific papers published by authored based in other nations, specifically the United States. Through an examination of papers published in the leading journal Nature and its derivative journals – Nature Biotechnology, Nature Materials, Nature Methods etc. (we refer to these as Nature X) - we explore the lower citations of papers that have been through the same review process and yet systematically seem to have a lower impact. In the period from 1980 – 2000 the impact gap was large. In the past decade that gap seems to have been reduced – we explore the mechanisms behind this reduction that enables China’s place at the knowledge frontier.
Even as we stand on the cusp of the broadest set of changes to the US Patent Law in two generations, virtually no empirical analysis has been conducted on the impact of the primary components of the proposed reforms. Until now. In this paper we investigate the expected effects on patenting behavior of the major change in the America Invents Act of 2011: a shift in the patent priority rules from the US’s traditional “first-to-invent” system to the dominant “first-to-file” system. This is a deeply controversial change: Opponents argue that first-to-file disadvantages small inventors and leads to lower quality patents. Those in favor emphasize administrative simplicity and the cost savings of first-to-file. While there has been some theoretical work on this topic, we use the Canadian experience with the same change the US is considering as a natural experiment to shed the first empirical light on the question.
Our analysis uses a difference-in-difference framework to estimate the impact of the Canadian law change on small inventors. Using data on all patents granted by the Canadian Intellectual Property Office and the US Patent and Trademark Office, we find a significant drop in the fraction of patents granted to small inventors in Canada coincident with the implementation of first-to-file. We also find no measurable changes in patent quality. The results are robust to several different specification checks. While the net welfare impact that can be expected from a shift to first-to-file is unclear, our results do reveal that, contrary to the conventional wisdom, the rule change is not free — it is likely to result in reduced patenting behavior by individual inventors.
Untangling Searchable and Experiential Quality Responses to Counterfeits
Yi Qian (Northwestern University), Qiang Gong (Southwest Finance University of China), Yuxin Chen (Northwestern University)
In this paper, we untangle the searchable and experiential dimensions of quality responses to entry by counterfeiters in regions that have weak intellectual property rights. One of our key theoretical predictions is that entries by counterfeiters induce incumbents to upgrade the searchable quality (e.g. appearance) of their products more and improve the experiential quality (e.g. functionality) less, as compared to entries by generic products. This prediction uncovers the nature of product differentiation and helps in analyzing the real-world innovation strategies employed by authentic firms in response to entries by counterfeit entities.
This paper improves patent value model by introducing unexpired patents into the model. We estimate the value of invention patent of China and make a comparison over patents from U.S., Japan, and European patent owners. Patent value of China is much lower than that of U.S. and Europe. This reflects the gap of R&D productivity and quality between China and developed countries. The improved model can further reveal larger difference between different patent owner groups. On the other hand, patent forward value is generally a decreasing function of the age of patent. Hence it is highest when the patent is granted, and falls to zero at the age of expiration. The forward value reflects closely with the patent renewal information based value distribution, however, it may reveal value distribution in the longer time durations, and may serve as other form of the value distribution by unexpired patent.
Matthis De Saint-Georges and Bruno Van Pottelsberghe de la Potterie
This paper presents a quality index for patent systems. The index is composed of nine operational design components that help shape the transparency of patent systems and affect the extent to which they comply with patentability conditions. Seven factors are related to rules and regulations (e.g., grace period, opposition process and continuation-inparts), while two factors measure patent offices resource allocation (i.e., workload per examiner and incentives). The index is computed for 32 national patent systems, it displays a high heterogeneity across countries. Cross-sectional quantitative analyses suggest that the demand for patent rights -or the propensity to patent- is lower in patent systems with a higher quality index, controlling for research efforts, patent fees and the "strength" of enforcement mechanisms.
In order to improve patenting awareness and boost innovation, the central and local governments in China have implemented policies of various subsidies for patent applications. Almost all provinces have had some subsidy policies in place since around 2003, on top of which many cities have their own subsidies for patent applications. This study examines the effects of such subsidies on patent filing, in terms of both quantity and quality of patent applications. We study six neighboring cities in Jiangsu province, where one city, Zhangjiagang, increased the amount of subsidy per patent application in June 2006 but subsidies in the other cities remained unchanged. We implement a Dif-in-Dif strategy to examine the effects of the subsidy increase on patent filings by firms in Zhangjiagang, compared to those in the other five cities. We find a significant increase in the number of invention patent filings from Zhangjiagang after June 2006. Meanwhile the quality of patent applications from Zhangjiagang did not drop after the policy change, compared to those from the other cities. The results suggest that patent subsidies indeed encourage firms to file more applications, but not at the cost of lower quality.
Due to its fragmentation and the difficulty of collecting data, European patent litigation has rarely been investigated across the various nations in which it occurs. This paper overcomes this vacuum, analyzing a never-before available dataset on patent actions in seven European countries during 2000-2010. We observe striking differences in the likelihood of reaching a final decision in patent litigation across jurisdictions, with much larger relative frequencies of decisions in some countries (e.g., the Netherlands) than in others (e.g., the UK). Litigation intensities also vary widely across technological areas, although the split among the types of court action (e.g., patent validity versus infringement) tends to be more regular, regardless of field. The variability we find in incidence across technological fields suggests differences in the dynamics of patent enforcement across industries, possibly due to differential costs or higher asymmetries of information or stakes in the outcomes. The cross-country patterns we find also highlight institutional differences across countries, all of which drive the costs and incentives to use the various courts, and help confirm the fragmentation in European technology markets. This article thus adds evidence to the ongoing policy debate about the incidence of forum shopping in Europe, and the extent to which lower predictability and legal certainty may be affecting the returns to firms from engaging in technological innovation and entering markets across the continent.
Dietmar Harhoff (LMU Munich)
Chinese utility model and invention patents
Brian Wright (Berkeley) with Siway Cao
Diffusion of New Drugs in the Post-TRIPs Era
Iain Cockburn (BU) with Ernst Berndt (MIT) and Nathan Blalock
We examine the international diffusion of new drugs under the post-TRIPS intellectual property rights regime. Even after controlling for drug characteristics and variation in national health expenditure, we find substantial differences across countries in the probability of a drug being commercially available, lowest in countries such as Brazil, China and India with historically weak patent protection. Notwithstanding obligations now in force under the TRIPS Agreement to provide patent protection for pharmaceutical products, sellers of new drugs are much less likely to have market exclusivity in these countries. Conditional upon being launched, a drug is 5 to 25 times more likely to be generic/multisource in these countries than in, for example, Spain.