Do Patents Enable Disclosure? Evidence from the Invention Secrecy Act

Abstract

This paper provides novel empirical evidence that patents enable knowledge disclosure.The analysis exploits the Invention Secrecy Act, which grants the U.S. Commissioner for Patents the right to prevent disclosure of new inventions that represent a threat to national security. Using a two-level matching approach, we document a negative and large relationship between the enforcement of a secrecy order and follow-on inventions, as captured with patent citations and text-based measures of invention similarity. The effect of secrecy orders is particularly salient for geographically-distant parties and for inventions in the same technological field as the secreted patent.JEL codes: O31, O33, O34

Analysis of Asian Marketing Status of L 'Oreal Group

“…The presence of a patent directly affects the price of a product. The relationship between the two is proportional [26]. Therefore, the higher pricing of L'Oré al Group's premium line of products contains more patents that allow for better quality products.…”

Patents and knowledge diffusion

“…On the other hand, a recent strand of research based on quasiexperimental approaches has produced growing empirical evidence of a positive effect of patent disclosure on innovation (Furman et al, 2018;Baruffaldi and Simeth, 2020;de Rassenfosse et al, 2020). Furman et al (2018) investigate the effect of information disclosure through patents on subsequent innovation and exploit the opening of new patent libraries in the pre-internet era for identification.…”

“…de Rassenfosse et al (2020) evaluate the extent to which knowledge flows are disrupted when a patent application to the USPTO is temporarily kept secret because of national security concerns. 3 Their analysis shows that patented inventions cited by a patent that is subject to a secrecy order received, on average, between 30 and 50 % fewer forward citations than a group of suitable control patents during the period in which the secrecy order was in place.…”

Buyers' role in innovation procurement: Evidence from US military R&D contracts

“…As reported in the FAS data, about 25% of these patent applications are filed by private entities and did not receive any kind of support by the US government. de Rassenfosse, Pellegrino, et al (2019) show that in a sample of over 2800 patents with a secrecy order imposed (and later rescinded) between 1982 and 2006, the secrecy order lasted less than 3 years for about 50% of the patents, and less than 5 years for almost 70% of the patents. In addition, only about 15% of the patents applied for between 2000 and 2006 that had a secrecy order imposed and then rescinded, acknowledge support from a federal R&D contract.…”