DP6499 Per un Pugno di Dollari: A first Look at the Price Elasticity of Patents

Author(s): Gaétan de Rassenfosse , Bruno van Pottelsberghe de la Potterie

Publication Date: September 2007

Keyword(s): fees , patent filing , price elasticity

JEL(s): O30 , O31 , O38 , O57

Programme Areas: Industrial Organization

Link to this Page: www.cepr.org/pubs/dps/DP6499.asp.asp

This paper analyzes the role of patent filing fees requested by the member states of the European Patent Convention (EPC). We provide a first empirical evidence showing that the fee elasticity of the demand for priority applications is negative and significant. Given the strong variation in absolute fees and in fees per capita across countries, this result witnesses a suboptimal treatment of inventors across European countries and suggests that fees should be considered as an integral part of an IP policy, especially in the current context of worrying backlogs. In addition, we show that the transfer rate of domestic priority filings to the EPO increases with the duration of membership to the EPO and the GDP per capita of a country, suggesting that member states experience a learning curve within the EPC. The high heterogeneity in the transfer rates casts some doubts on the practice that consists in relying on filings at the EPO or at the USPTO to assess innovative performance of countries.