Discussion paper

DP16320 Quick or Broad Patents? Evidence from U.S. Startups

We study the effects of patent scope and review times on startups and externalities on their rivals. We leverage the quasi-random assignment of U.S. patent applications to examiners and find that grant delays reduce a startup’s employment and sales growth, chances of survival, access to external capital, and future innovation. Delays also harm the growth, access to external capital, and follow-on innovation of the patentee’s rivals, suggesting that quick patents enhance both inventor rewards and generate positive externalities. Broader scope increases a startup’s future growth (conditional on survival) and innovation but imposes negative externalities on its rivals’ growth.

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Citation

Ljungqvist, A, D Hegde and M Raj (eds) (2021), “DP16320 Quick or Broad Patents? Evidence from U.S. Startups”, CEPR Press Discussion Paper No. 16320. https://new.cepr.org/publications/dp16320