The Relationship between Patent and Second Tier Patent Protection: The Case of the Dutch Short-Term Patent System Abolition

Abstract

While the effect of changes in patent protection strength on innovative activity has been studied extensively, the role of second tier patent protection in national innovation systems has been a neglected research topic. Empirical evidence on the interaction between patent and second tier patent protection, especially in advanced economies, remains very scarce. This paper studies how the abolition of Dutch short-term patent system affected the level of domestic patent filing activity in the short and medium run. Synthetic control method is implemented to investigate the effect. The results indicate that the abolition of the short-term patent institution did not affect the level of domestic patent applications, which indicates that there was a shift from short-term patents to normal patents. The result questions the justification of the short-term patent protection in advanced economies: a better option might be to adjust patent systems for the needs of SMEs and individual inventors than to have separate second tier patent protection institutions.