Patent Policy and Innovation

Patent Policy and Innovation

Do Legal Rules Deliver Effective Economic Outcomes?

Hazel V.J. Moir

This empirical study uses a scientifically selected sample of patents to assess patent quality. The careful evaluation of the assumptions in alternative economic theories about the generation and diffusion of new knowledge demonstrates that the height of the inventive step is critical to effective and efficient patent policy.

Chapter 5: Finding and avoiding existing knowledge

Hazel V.J. Moir

Subjects: economics and finance, economics of innovation, intellectual property, innovation and technology, economics of innovation, intellectual property, law - academic, intellectual property law


A major strand in the literature on business method patenting suggests that the reason so many obvious patents are granted in this field is that much of the knowledge and know-how in business is not documented. This issue is explored in Section 5.2. Where the examiner does identify existing written knowledge and uses this to reject an application on novelty or inventiveness grounds a common response is for the applicant to make minor amendments to the claims and then argue that this overcomes such objections. In Australia the ability to endlessly amend specifications was introduced in the Patents Act 1953. The economic (and administrative) impact of this policy change has never been assessed. Continual amendment is also a feature of the US system. In contrast the EPO procedures provide less open-ended opportunities for amendment. Cases where amendment was critical to gaining grant of a patent are discussed in Section 5.3. Examination procedures at the EPO, the UKIPO, the USPTO and at IP Australia set up a process whereby the examiner must disprove the eligibility of the application rather than the applicant demonstrating novelty and inventiveness. Cases where applicants use this reverse onus of proof presumption to challenge inventiveness objections are discussed in Section 5.4.

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