Empirics prove – increasing the strength of patents causes a surge in patenting

The increase in R&D expenditures has contributed to the surge in patent applications, but cannot fully explain it. Changes in competition seem to have played a key role in growing patenting trends in ICT industries. Some studies have reported the relevance of building patent portfolios and strategic patenting behaviour for firms in the US semi-conductor industry and the European mobile phone industry. Changes in patent regimes might have also contributed to the increase by making patents more valuable and easier or less costly to obtain. The surge in patenting in the United States, notably in ICT, started after important court decisions increased damage awards to plaintiffs in infringement litigation, hence increasing the value of patents (e.g. the Kodak-Polaroid case in 1986). The extension of the subject matter, notably in the United States, resulted in a greater number of patents for software and genetic inventions. In addition, high grant rates in the United States may have attracted more applications which in turn have generated more grants, and part of the surge in EPO might have come from a sharp reduction in patent fees (effective in July 1997). Overall, a mixed picture emerges, with part of the surge in patenting being explained by growth in inventions, notably in new areas, part being contingent upon changes in the economic environment and in patent regimes (Kortum and Lerner, 1999; Kortum, Eaton and Lerner, 2003).