Do Inventors Value Secrecy in Patenting? Evidence from the American Inventor's Protection Act of 1999

Abstract

This study examines the revealed preferences of inventors towards secrecy in patenting by analyzing their disclosure choices before and after the enactment of the American Inventor’s Protection Act (AIPA) of 1999. We find that 7.5% of U.S. patent applications use AIPA’s provisions to keep their inventions secret before patent grant. Small U.S. inventors, in particular, are more likely than large corporations to prefer disclosure over secrecy for their most important inventions. Our findings question the conventional wisdomwhich seems to have shaped important policythat the disclosure of patent applications harms U.S. invention by increasing the risk of imitation for small inventors.