Essays on R&D, Innovation and Patents: Empirical Constructs and *Policy Analysis of Uncertainty

Abstract

Even so, institutions of patent enforcement that eliminate all uncertainty in patent rights are not necessarily desirable. Using an incomplete contracts framework, we show that optimal patent policies will exploit the risk of post-issuance invalidation so as to induce the patentee to provide a more complete disclosure of the prior art to the Patent Office. Such information improves the efficiency of the patent system by reducing the welfare losses due to improvidently-issued patent claims, and by creating more stable property rights, which creates greater incentives for investment in R&D.