Patent Pending – Why Faster Isn’t Always Better

In this study we analyze why firms intentionally delay the patenting process. We analyze 443,988 applications at the German Patent Office, which—due to its comparatively long, seven-year examination deferral system—provides its applicants with a very strong leverage for increasing pendency of their applications. More than 50 percent of all filings show applicant-induced delays, more than 20 percent even for the maximum duration of seven years. A mail survey that was answered by 445 inventors (response rate 34.6 percent) of such patent applications reveals the motives behind the delays. The more importance is attributed to “create insecurity” and “gain time for evaluation” as filing motives, the more likely applicants delay the patent process. Implications from our study are twofold. Whereas patent applications that are withdrawn after a re-evaluation by the applicant disburden the patent office, patents that are filed solely in order to create insecurity give cause for concern. Such patent applications reduce transparency of the patent system. Inefficient relocation of resources from innovative activities to patent screening and the development of invent-around solutions by third parties may result. This would ultimately hamper innovation. Our results suggest that a reduction of the maximum examination deferral period from seven to three years would mitigate that problem.