Neel Sukhatme, Economics

Regulatory Monopoly and Differential Pricing in the Market for Patents

Wed, 10/08/2014
438 Robertson Hall
Event Category: 
Graduate Students

Please join us on Wednesday, September 24, for a seminar with Neel Sukhatme, Ph.D. student in Economics . 

LEGS, or "Law-Engaged Graduate Students," meets during the academic year to discuss a work in progress by one of our Graduate Associates. Academic papers, dissertation proposals, and dissertation chapters have been presented at these meetings, to an audience of fellow graduate students.

Abstract:  "Patents are limited-term monopolies awarded to inventors to incentivize innovation. But there is another monopoly that has been largely overlooked at the heart of patent law: the monopoly of the U.S. Patent and Trademark Office (PTO) over the granting of patents. This Article addresses this topic by introducing the notion of a regulatory monopoly, where a single governmental actor has the power to set prices in a regulatory area.

The Article explains how regulatory monopolists like the PTO could enhance social welfare via differential pricing—by charging regulated entities differing fees based on their willingness and ability to pay. In particular, the Article shows how the PTO could increase its revenues and promote innovation by charging different patent “prices” for inventions in different industries. Such pricing could also be used to tailor effective patent term across industries, an emergent goal for many patent scholars.

The Article then applies the author’s recent empirical research to generate potential differential patent price structures. This research takes advantage of a natural experiment—a change in patent term rules due to enactment of the TRIPS agreement in 1995—to measure the relative importance of patent protection across different industries. The Article concludes by discussing how recent patent reform (the America Invents Act of 2011) provides a legal basis for the PTO to conduct differential pricing."