|Author Name||NAGAOKA Sadao (Faculty Fellow, RIETI) / YAMAUCHI Isamu (Research Associate, RIETI)|
|Creation Date/NO.||March 2017 17-E-040|
|Research Project||Study on Industrial Innovation Capability and Innovation Infrastructure|
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We examine how significantly the information constraint of the patent office affects its examination quality in terms of type I and type II errors (wrong grants and wrong rejections). For identification, we exploit the exogenous policy change in Japan which accelerated the timing of examination. Such acceleration increased significantly both the grant rate and the frequency of appeals against the rejections of the patent office, despite the higher examination request rates. These results reveal that more information constraint increases both types of errors, but the increase in wrong grants is dominant, consistent with the design of the patent examination system where an examiner has the burden of proof in rejections and the applicant has the chance to challenge the rejections. These effects become stronger in technology sectors with stronger information constraint: those sectors which have both short technology cycles and early examination requests so that the age of relevant prior art at examination is young. We also show that longer initiation lags for an international application with foreign priority significantly reduces its grant rate. These findings suggest that the patent office is under information constraint and a better information infrastructure will significantly improve patent quality.