An Empirical Study of Patent Disclosure

Abstract

This study investigates the disclosure of patent knowledge. In the patent literature, patent disclosure is relatively understudied. By focusing on three patent views - signaling view, strategic power view, and litigation risk view, we investigate what factors enforce firms to disclose enabling knowledge of their patents. Based upon U.S. patent data, we test how the three views of patent explain the variations of patent disclosures in four different levels: firm, industry, technology, and international. The data show that firm size is positively related to the information disclosure of patents. We also find that the number of industry competitors is negatively associated with patent disclosure. More rather than less interdependent patented technologies are positively related to patent disclosure. Finally, patents granted to foreign firms are found to disclose less than patents granted to U.S. firms. Overall the data suggest that signaling effects and litigation risks are major determinants to firms' decision of the patent disclosure. As patent disclosure increases over time even after controlling for cross-sectional effects in the various levels, however, strategic power appears to explain more about the increasing trend of patent disclosure as patent reforms become more effective over time.