Research: PTO granted patents at a 9% higher rate to entities that generated higher fees

Monday, November 18, 2013

In a study that analyzed more than two decades of patent grant rates by the United States Patent and Trademark Office (PTO), Professor Melissa Wasserman and co-author Michael Frakes, a law professor at Cornell University, suggest that financial incentives, and not just the merits of the invention, may be, in part, driving the PTO’s decision whether or not to grant a patent.

By comparing the PTO’s granting patterns before and after 1991, when the agency became almost exclusively funded by user fees, Wasserman and Frakes determined that when the agency was in need of more funds, it granted patents at a higher rate to entities that generated higher fees. For example, after the fee reform in 1991, large entities were granted patents at a rate 9% higher than small entities, whose fees are 50% lower than those of large entities. The study also showed that the grant rate variations are more likely to occur at times when the PTO is underfunded. 

SSRN Paper