Dissertation/Thesis Abstract

Patent System, Firm Patenting Strategy and Technology Progress
by Cao, Siwei, Ph.D., University of California, Berkeley, 2015, 68; 3720408
Abstract (Summary)

The patent system of the People’s Republic of China has only a history of about 30 years, yet it has undergone three major policy changes to keep up with the tremendous pace of economic and technological progress in China. Once a country in which technological advance relies primarily on copying and imitating foreign innovations, China is gradually shifting towards a regime that emphasizes on strong intellectual property and indigenous innovation. It is fascinating, therefore, to witness this transition. It is important to enhance my understanding of the patent regime as a mechanism to promote innovation and the dissemination of knowledge, as is the purpose of the thesis.

Both of the chapters in this dissertation focus on patent applicants’ preference for how quickly they want their patent applications to be processed. This is nontrivial primarily due to heterogeneity in firm characteristics, nature of invention, market structure, technology backgrounds and many unobservable factors. I propose two factors that partially determine an inventor’s preference for speed of patenting: the inter-temporal value patents of their invention and the speed of technological progress.

The first chapter investigates the heterogeneous inter-temporal patterns of inventions’ value flow and the associated applicants’ patenting strategies for a small set of United States patents. To measure the characteristics of different inventions’ inter-temporal value flow, we exploit a policy lever provided by the Chinese government that allows patent applicants to freely choose between one patent protection of short examination delay, short protection period and another patent protection of long examination delay, long protection period. We find that the majority of applicants that favor the former protection (short&short) have Electronics and Mechanics inventions, whereas applicants that favor the latter ( long&long) are mostly within Pharmaceuticals and Drugs. We then exploit this variation in patent choices under the Chinese regime with applicants’ patenting strategies in the U.S., for identical inventions. The empirical results suggest the short&short Chinese patent holders have a strong tendency of pursuing early U.S. patent issuance whereas the long&long patent holders have a strong tendency of maintaining their U.S. patents for long periods. The results are robust with or without technology field fixed effects.

The second chapter analyze the effect of faster technology development on firms patenting strategy. Using a dataset with information about patent applications in both China and the US, I find that firms are willing to secure early patent grants when technology moves ahead faster. The conventional wisdom that a patent secures a flow of monopoly profits that depreciates at a constant speed over time is not consistent with my empirical findings. Faster technology progress shifts the profits towards the early periods, making early grants more important. The empirical results suggest that a more flexible patent regime which offers options for speed is more efficient.

Indexing (document details)
Advisor: Wright, Brian D.
Commitee: Perloff, Jeff M., Shapiro, Carl
School: University of California, Berkeley
Department: Agricultural Economics
School Location: United States -- California
Source: DAI-A 77/01(E), Dissertation Abstracts International
Subjects: Asian Studies, Management, Commerce-Business, Economic theory
Keywords: Invention patent, Patenting strategy, Speed, Technology change, Utility model
Publication Number: 3720408
ISBN: 978-1-339-01395-4
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