The effects of patent regime changes: A case study of the European patent office

Patent system in Europe has undergone significant changes during the 1970s around the establishment of the European Patent Office (EPO), and this paper tries to quantify the influences of such policy changes on the private value of European patents. Based on the patent renewal records, I estimate the private value of patents in Germany, France, and the UK obtained through the EPO patenting route during the early 1980s, and compare the estimated value with the patent value in the same three countries before the establishment of the EPO, as estimated by Pakes [Pakes, Ariel, 1986. Patents as options: some estimates of the value of holding European Patent stocks. Econometrics, 54 (4), 755-784]. The average quality and the private value of the EPO patents are substantially higher than those obtained through the national route. The uniform examination and granting procedure at the EPO has effectively eliminated the inter-country differences in the patentability standards and the scope of patents and significantly decreased the differences in the patent value across these countries. I also find that the extension of the statutory limit to the maximal length of patent life and changes in the renewal fee schedule only had modest effects on the patent value, and that the learning process of the EPO patents are much longer than that of the national patents.