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Intellectual Property Rights

Innovation, Governance and the Institutional Environment

Edited by Birgitte Andersen

Intellectual Property Rights is cutting edge in addressing current debates affecting businesses, industry sectors and society today, and in focusing not only on the enabling welfare effects of IPR systems, but also on some of the possible adverse effects of IPR systems.
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Chapter 7: The Determinants of Patentees’ Use of ‘Continuation’ Patent Applications in the United States Patent and Trademark Office, 1980–99

Stuart J.H. Graham


Stuart J.H. Graham ABSTRACT This chapter describes and examines the use of the ‘continuation’ patent application procedure available in the United States but not generally elsewhere in the world. The continuation procedure allows a US patent applicant to postpone the issue of a patent, affording inventors several strategic opportunities, among which are delay and secrecy. The chapter also demonstrates the perverse effects of so-called ‘submarine patents’, continuation patents that surface in a marketplace in which the patented technology has been widely embraced by adopters unaware that a valid patent was pending and hidden from view. In addition to examining several specific cases of submarine patents – cases in which the patentee was able to extract extraordinary economic rents – the chapter investigates through negative binomial regression the determinants of patentees’ use of the continuation procedure. Continuations are shown to be significantly more likely when the resulting patent is held by an organization, is held by a domestic (US) entity, is comprised of more patent claims, or is drawn from a wider breadth of technologies. The chapter also examines how and why innovators in the semiconductor and pharmaceutical technologies have employed the continuation patent application procedure, demonstrating that in each of these important sectors the continuation procedure has been widely used, and may offer strategic benefits. Keywords: Patents, Submarine patents, Patent continuation applications, Intellectual property strategy 215 216 The performance of the patenting process … [The patent holder, Jerome Lemelson] has a history of using continuing patent applications in such a...

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