(Georgia Institute of Technology, 2004-10)
Graham, Stuart J. H.
This paper examines firms’ uses of secrecy and patenting in order to explore three
elementary questions of firm intellectual property strategy: First, are there
complementarities between patenting and secrecy that firms exploit when crafting their technology market strategies? Second, what drives the firm’s choice of a patent-secret mix when developing a strategy to sustain to itself competitive advantage? And third, what are the consequences for the firm of one or another choice or mix? I argue that the use of the U.S. "continuation" procedure affords patent applicants a strategic opportunity. Because continuation practice allows pre-issue application delay, pursuing a continuation patenting strategy may allow the firm to better control the technology development and appropriation process, in terms of the timing of disclosures and managing technological
change, preserving an early patent priority date for the invention while protecting an
extended period of secrecy against competitors’ discovery. A strategic opportunity arises from the added term of secrecy that the continuation procedure affords to patent applicants. I argue that this period of secrecy may be a complement to the act of patenting itself. This paper employs data on the use by firms of continuation applications in the United States from 1975-1995 in order to empirically test the uses by firms of these secrecy strategies, and to compare these uses against other proposed motivations for patentees’ uses of the continuation application. Results support complementary uses byfirms of patents and secrecy in their appropriability strategies.
(Georgia Institute of Technology, 2004-10)
Graham, Stuart J. H.
This paper employs new data on the use by patentees of continuation applications in the United States from 1975-2002 to shed light on patentees' motivations for and actual uses of the continuation application procedure, a procedure available only in the U.S. which allows a patent applicant to voluntarily delay issue of a patent. The paper investigates the affect that continuation
use has had upon patent grant lags, evaluating whether routinely used research methods that ignore continuation delays may be improved by accounting for continuations in patents' application lineage. This paper demonstrates conclusively that a sizeable share of patent applicants employs the continuation, that continuation use by patent applicants results in substantial additional delay in the time-to-grant statistics for associated issued patents, and that
significant changes in the pattern of continuation use have occurred since Congress enacted legislative amendments intended to curb the procedure’s use. Evidence provided in this paper supports a contention that the continuation has been economically important in shaping the environment for innovation, influencing industrial organization, and social welfare. The paper also demonstrates that continuation practice is common in overall US patenting, and that in some
important sectors, including electronics, computing, pharmaceuticals, chemicals, and
biotechnology, a substantial minority, and in some instances a majority of patents in recent years have issued with continuation in their application lineage. Furthermore, substantial intersectoral differences are shown in innovators’ use of the continuation, as well as significant changes in the
patterns of usage over time.