What Effect Will a Pro-Patent Policy Have on Industry? - Taking Lessons From US Patent Reforms

ABSTRACT

What effects will a pro-patent policy have on Japanese industries? The following report will explore this question by examining the economic theory of the optimal patent policy and surveying empirical studies on U.S. patent reforms.

Economic theory tells us that the optimal patent system changes along with the nature of industry and technology and, moreover, suggests that the series of patent reforms made in the US during the 1980s might not have been sufficient in facilitating the innovation of high-technologies such as computers and communications devices. Empirical research on these reforms supports this theoretical conjecture, suggesting that their effects were indeed limited in promoting R&D and, with respect to some high-technology industries, that they could have even been impeding.

With the establishment of the Intellectual Property High Court in April of 2005, Japan will enter a new stage in pro-patent policy. In attempting to manage a patent policy that would support the rise of competition in Japanese industries, the economic theory for the optimal patent policy can be an important guide. Such a theory, however, has yet to be established and will require further empirical research.