Donges and Selgert, 2020
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- Alexander Donges; Felix Selgert. The Consequences of Radical Patent-Regime Change. August 2020. Presented at Economic History Association, Sept 12-13 2020 paper link may be conference-specific
- Donges, Alexander & Selgert, Felix, 2019. "The Consequences of Radical Patent-Regime Change," Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203662, Verein für Socialpolitik / German Economic Association
- Sources of versions
- https://ideas.repec.org/p/zbw/vfsc19/203662.html
- https://econpapers.repec.org/paper/zbwvfsc19/203662.htm
- https://www.econstor.eu/bitstream/10419/203662/1/VfS-2019-pid-28285.pdf
- Abstract from EHA-presented paper version
This paper analyzes the consequences of radical patent-regime change by exploiting a natural experiment: the forced adoption of the Prussian patent system in territories annexed after the Austro-Prussian War of 1866. Compared to other German states, Prussia granted patents more restrictively by setting higher novelty requirements, while patent fees were much lower. By using novel hand-collected data, we show that the forced adoption of the Prussian patent law caused a massive drop in the number of patents per capita in annexed territories. By contrast, we find a significantly positive effect of patent-regime change on World’s Fair exhibits per capita, which we use as a proxy for non-patented innovation. We interpret this finding as evidence that restrictions on the granting of patents, which foster competition and technology diffusion, can be conducive for the generation of innovation. Keywords: Innovation, Intellectual Property, Patents, Patent Law, Technological Change. JEL Classification: N13, N43, O14, O33, O34
A helpful paragraph from page 12 of the EHA version:
- In 1866, directly after the Austro-Prussian war, Hanover, Hesse-Kassel, Nassau, and Frankfurt am Main came under Prussian rule. . . . [The] Prussian administration did not harmonize the legal system until the introduction of a nationwide German civil code in 1900 [but] it unified the patent system immediately after the annexations by dissolving all former patent authorities and adopting the Prussian patent law in all new provinces.
- The Prussian Ministry of Trade and Commerce [managed] patents for the entire monarchy (including all newly gained territories) after the annexation, which means that it was not possible to get a patent that was valid only in a single province, say Hanover. Because of the larger territory and the expected increase in the number of patent applications, the Prussian government also increased its staff at the technical commission in 1866. . . . [O]verall costs of adopting the Prussian patent system were relatively low because the administration did not rely on subordinate administrative bodies (e.g. regional patent offices) but only on a central patent administration in Berlin.
- Notes from EHA presentation
- most Prussian patent applications were rejected, in some years 90%
- the examiners were full time govt staff
- terms were 5 years only in the 50s and 60s then 3 yrs in 1870s
- annexed territories had a less restrictive/intense technical examination, a wider definition of novelty than Prussia's, similar patent terms (durations0, significant differences for costs (2 thaler in Prussia vs 104 Thaler average income, 6-31 Thaler in Hanover, Hesse-Kassel 10-200 Thaler, Frankfurt 7.5 Thaler, and smaller coverage (that is the domain, or market size, the jurisdiction, was smaller)
- They use a panel data set of patents, 1855-1877, filed by domestic inventors within each principalit
- They separately estimate World's Fair exhibits per capita in the world's fair of 1862 in London, 1873 in Vienna, and 1876 in Philadelphia
- Patents are in newly constructed data sets, from lists of Zollverein members, from Archives ; World's Fair data is from Petra Moser.
- Mokyr asks there was an appeals process after a rejection, and I believe the answer was no.
- I asked if the patent offices in the territories were shut down and all patent applications sent to Berlin: YES. Only the Prussian office (and culture) continued in all these territories. Was it possible the Prussian evaluators were more harsh to, or had trouble understanding, these "foreign" patents from these new sort-of "colonies"? He says no, it's not likely, and they did some test for such discrimination, and didn't find any.
- notes from ASSA presentation by Selgert
- 1866 annexation by Prussia of Hannover caused standardization of patent rules and reduction of patent flows in the annexed territories
- Previously, the annexed territories had a technical examination, but less strict, a wider definition of novelty, and significant differnces in patent costs: in Hanover, 6-31 Thaler, in Hesse-Kassel 10-200 Thaler, Nassau 25-34 Thaler, and in Frankfurt 8.5 Thaler. They havd smaller market size(s) de facto.
- Whereas in Prussia: High standard technical examination with stricter definition of novelty, high rejection rates, 5 year patent terms (1850-1870ish), 3 years in 1880s. Annexed territories
- They examine effect of patent law change on World's Fair exhibits per capita at London 1862, 1873 Vienna, and 1876 Philadelphia (3 moments of observation, one of which is before the 1866 event)
- look up Rgierungsbezirke, relating to district level data
- helpful map
- effect after 1866 in regression table seems to be to reduce patenting the annexed territories in metals/mining and instruments, but to increase it in foodstuff and kindred products.
- focus on chemical industries: comparing counts of patents and World's Fair exhibits
- Petra Moser discusses: the previous zones were called Kingdom of Hanover, Electorate of Hesse (Hesse-Kassel), the Duchy of Nassau, and Free City of Frankfurt am Main
- 10% of applications were granted in Prussia, per Heggen 1975
- Prussia had low patent fees, in the range of 1-2.5 Thaler, which was just 1% of the average annual wage of 104 Thaler for a craftsman in mid-1800s
- other states were less strict, and some could not AFFORD proper examination
- her interpretation is that the numbers of patents fell in the annexed states in ALL fields; doesn't confront Selgert's assertion about a rise in foodstuffs patents -- or maybe the dep var is exhibits in one of these
- she says they find the 1866 change/reform INCREASES the exhibits per capita from the annexed territories
| Original title | Do Legal Differences Matter? A Comparison of German Patent Law Regimes before 1877 |
|---|---|
| Simple title | Legal Differences among German Patent Law Regimes before 1877 |
| Authors | Alexander Donges, Felix Selgert |
| Date | 2019 |
| Countries | DE |
| Languages | en |
| Keywords | patents, Prussia, Bavaria, Saxony |
| Journal | Jahrbuch für Wirtschaftsgeschichte, Economic History Yearbook |
| Related to aircraft? | 0 |
| Page count | 46 |
| Word count | |
| Wikidata id |
