The Timing of Disclosure and the Size of Innovation

The Timing of Disclosure and the Size of Innovation June 25, 1999 Dan Johnson Wellesley College David Popp The University of Kansas

JEL Codes: O34, O38

Abstract In most industrialized nations, a patent application is made public 18 months after it is filed. The one exception is the United States, which does not publish any information concerning a patent until the patent is granted. Recently, Congress has considered several bills that would change U.S. law to require disclosure of patent applications after 18 months. Opponents of such a change argue that major inventions would be discouraged, as their applications take longer to examine. This paper tests the claim that major inventions take longer to be awarded patents. Using patent citation data, we show that inventions that have longer lags between a patent application and a patent grant are cited more frequently than other patents. We then look at the decision of where to file a patent to see if the secrecy afforded patent applications in the United States is valued by inventors. We conclude that although large inventions will be most affected by the proposed legislative change in disclosure, it is not obvious from the data that the current period of secrecy is valuable to their applicants.