Patent Grant Delays and Future Innnovative Activities

with Manpreet Hora and Karthik Ramchandran.

The patent examination process that evaluates inventions against three fundamental criteria - novelty, usefulness, and non-obviousness often result in longer pendency of patents before grant. Longer patent pendency could result in delays in the launch of new products, reduce the operating performance and market value of firms, and reduce the likelihood of licensing patents. We study the impact of delays in the grant of patents on inventors’ future innovative activities. The results show that longer patent pendency negatively affects inventors’ future patenting activities over one to five years after the patent grant. I also evaluate the effects of the USPTO’s capacity decisions of recruiting examiners with the rise in the number of applications.