1996 American Economics Association Session on "Patent Policy and Innovation"

An academic-practitioner panel on patent policy and innovation washeld as part of the 1996 annual meeting of the American Economics Association (AEA). This two-hour session examined the recent evolution of the patent system in the U.S. and abroad, and the impact that these changes are having on the innovation process.

In 1982, a centralized appellate court for all patent-related Federal cases was established. While its stated purpose was to be a streamlined venue for treating patent cases in a systemized manner, the court has taken an aggressively "pro-patent" stance. The strengthening of patent law has not gone unnoticed by corporations. Over the past decade, patents awarded to U.S. firms have increased by 50%, even as industrial research spending has remained constant in inflation-adjusted dollars. The number of patent suits filed has increased three-fold. As a consequence, U.S. corporations appear to be spending nearly as much litigating intellectual property each year as the $4 billion they are spending on basic research.

Despite the magnitude of these changes, neither economic policymakers nor top executives of technology-intensive firms have spoken publicly at much length about these issues. The panel soght to address this neglect, giving more visibility to this key area of economic policy.

The three papers in this session examined issues associated with patent protection and innovation. Papers were be both theoretical and empirical in nature, and from economic and legal perspectives. The papers were drawn from a two-day session on this issue that will be part of the National Bureau of Economic Research's 1995 Summer Institute meeting. In addition to academics, three leading practitioners served as discussants.

The session was be chaired by Professor Richard R. Nelson of the School of International and Public Affairs, Columbia University, and organized by Jean O. Lanjouw of Yale University and Josh Lerner of Harvard University.