Essays on the Economics of Intellectual Property

Abstract Chapter 1 The European Patent System (EPS) consists of National Offices and the European Patent Office (EPO). The complexity of the system is mirrored in the complexity of strategic options available to patentees when selecting the route of patenting. To date there is little evidence on how firms choose between EPO and national offices, nor which parameters influence this choice. The paper provides a recursive model of the two principal choices made by patent applicants: the selection of examining offices and of jurisdictions in which patent protection is obtained. We then derive and estimate instrumental variables models to establish the relative importance of fees, grant rates, examination duration and firm and patent characteristics in these choices. We identify sectors and types of firms that predominantly rely on the national offices or the EPO. We also identify significant levels of switching, driven by variation in grant rates across offices and by fee changes as well as variation in the duration of examination. We discuss implications of our work for theoretical and empirical analyses of patent systems. Abstract Chapter 2 Aim of this analysis is to study whether the global financial crisis of 2008 had a significant effect on how stock markets value firms’ investments in knowledge and branding as well as complementary investments in patents and trademarks. Building on data from European Intellectual Property Office (EUIPO) and European Patent Office (EPO) we construct a firm panel covering R&D, marketing and IP investments over the period 2005-2012. In addition, we estimate market value equations for the years 2005-2008 and 2009-2012. Empirical findings suggest that there are interesting differences in which investments contributed to market value before and after 2008. First, investments in R&D contribute far more significantly to the market value after the crisis than before. Second, it becomes apparent that after the crisis patent quality arises as a significant factor which increases value of the companies. At the same time patent quantity ceases to be an influencing factor in the market value equation after 2008.