USPTO reports and Economic Notes

In this IP Economic Note, we examine the causal impacts from the first randomized control trial (RCT) undertaken by the USPTO. The RCT, which focused on patent applicants without legal representation (pro se applicants), aimed to improve examination outcomes. The analysis demonstrates that additional guidance and communication during patent examination was an effective way to improve patent examination outcomes for pro se applicants, especially for women.

The United States Patent and Trademark Office released “Where are U.S. women patentees? Assessing three decades of growth.” The report uses county-level data to highlight where women inventors are patenting, and to identify local economic factors that are correlated with women’s participation. One finding reveals that women’s participation is increasing geographically. Between 1990-2019, 411 new U.S. counties have women patentees, a 32% increase. 

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In this IP Economic Note, we complement the results of the USPTO’s recently released Intellectual property and the U.S. economy: Third edition, with a look at the foreign trade activities of U.S. industries that most intensively use IP. We find that these industries accounted for nearly 80% of all commodity exports in 2019 and nearly 85% of services exports in 2017. The aerospace products and parts manufacturing industry was the leading commodity exporter in 2019, accounting for $140 billion, while the software publishing industry was the leading services exporter in 2017, accounting for $43 billion.

The update measures the intensity of IP use and its persistent relationship to economic indicators such as employment, wages, and output. It also includes new demographic information about the employees working in IP-intensive industries. The updated data are more refined, thus improving precision in identifying companies within industries and adding new industries to the report. 

Read the report or learn more about the image below at the IP and the U.S. economy webpage.

Technology diffusion is the spread and adoption of a new technology by inventors, companies, and other innovators. Technologies that diffuse broadly have potentially large effects on innovation, productivity, and economic growth. For example, steam power, electricity, and information technology greatly enhanced the volume, as well as the variety, of goods produced within the economy.

The figure below shows that the percentage of U.S. organizations (green line) and inventors (dashed blue line) that patent in AI increased from under 5% in 1980, to just over 20% in 2018. This is remarkable growth and shows that AI is increasingly important to U.S. invention.

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The USPTO report develops an AI algorithm to find AI in U.S. patents. That is, a machine learning AI algorithm is used to determine the volume, nature, and evolution of AI and its component technologies as contained in U.S. patents from 1976 through 2018. This approach improves the accuracy of identifying AI patents by better capturing the diffusion of AI across technology, companies, inventor-patentees, and geography.

More graphs on the diffusion of AI are also available at the infographics page for the Office of the Chief Economist (OCE).

This report updates the USPTO’s 2019 report on U.S. women inventor-patentees, “Progress and Potential,” using three years of new data, covering 2017 through 2019. It provides new information on women’s participation in the U.S. patent system, finding, among other things, that women make up an increasing share of all new entrants to the patent system, rising from about 5% of new inventor-patentees in 1980 to 17.3% by 2019 (see figure).

 

On June 19, 2014, the U.S. patent system experienced a major change. The U.S. Supreme Court reached a unanimous decision in Alice Corp v. CLS Bank International (Alice) that altered the law on patent subject matter eligibility (the types of inventions that are legally eligible for patent protection). Although legal changes and subsequent adjustments across the institutions in the patent system are not unusual, Alice deserves particular attention because of its potential economic consequences.

This USPTO report shows that in addition to increasing the percentage of first office action Section 101 rejections, Alice significantly increased uncertainty in the patent examination process. Economic theory and evidence show that greater uncertainty tends to reduce investments. Higher levels of uncertainty may also negatively affect previously issued patents by lowering their expected value, reducing patent purchases and licensing transactions, and limiting opportunities to obtain entrepreneurial financing.

In addition, the report shows that recent USPTO guidance for examiners (the 2018 Berkheimer memorandum and the 2019 Revised Patent Subject Matter Eligibility Guidance (2019 PEG)) largely reversed the impacts of Alice, reducing both the percentage of first office action Section 101 rejections and examination uncertainty. The figure above plots uncertainty in the first action stage of patent prosecution related to determinations of subject matter eligibility, before and after the 2018 Berkheimer memorandum and 2019 PEG. For Alice-affected technologies, the figure shows that the variability in first office action Section 101 rejection rates started to decrease after the issuance of the Berkheimer memorandum (dashed red vertical line). Although not as steep, a similar drop is apparent in the control group of other technologies. The memorandum, therefore, appears to have had no statistically distinct effect on examination uncertainty in Alice-affected technologies as compared to other technologies.

The 2019 PEG, however, had a much larger, statistically significant effect on examination uncertainty, particularly in Alice-affected technologies. As seen by the sharp downward kink in the solid blue line after the 2019 PEG (solid red vertical line), examination uncertainty significantly decreased in Alice-affected technologies (relative to the “Other technologies” control group).

Additional information on the impacts of Alice and subsequent USPTO guidance is available in the OCE report, "Adjusting to Alice: USPTO patent examination outcomes after Alice Corp. v. CLS Bank International."

The USPTO prepared this report in response to the Study of Underrepresented Classes Chasing Engineering and Science Success (SUCCESS) Act of 2018 (P.L. 115-273). The law required the director of the USPTO, in consultation with the Small Business Administration, to identify publicly available data on the number of patents annually applied for and obtained by women, minorities, and veterans and the benefits of increasing the number of patents applied for and obtained by these groups and the small businesses they own. It also required the USPTO to provide legislative recommendations on how to encourage and increase the participation by these groups as inventor-patentees and entrepreneurs.

A review of literature and data sources conducted by the USPTO found that there is a limited amount of publicly available information regarding the participation rates of women, minorities, and veterans in the patent system. The bulk of the existing literature focuses on women, with a very small number of studies focused on minorities, and only some qualitative historical information on U.S. veteran inventor-patentees. It also found that inventors who apply for and receive a patent may experience a wide range of personal benefits, including heightened prestige, increased income, promotions, new job opportunities, and increased professional networks.

Akcigit et al. (2017) match inventor-patentees to historical Census data to study the relationship between age, patenting, and income. They find that inventor-patentees have higher incomes. Importantly, the relationship persists even after removing the influence of occupation, migrant status, and a variety of other characteristics. The figure above plots the lifetime earning profiles for inventor-patentees, high-skill non-inventors, and other non-inventors. Starting after age 25, wages for inventor-patentees (solid line) are always greater than wages for non-inventors and high skilled non-inventors, with a smaller wage gap for high skilled non-inventors.

Additional information documented by the USPTO on the participation of women, minorities and veterans as inventor-patentees is available in the SUCCESS Act Study. 

The USPTO released "Progress and Potential: A profile of women inventors on U.S. patents," a report on the trends and characteristics of U.S. women inventors named on U.S. patents granted from 1976 through 2016. The report shows that women still comprise a small minority of patent inventors. Further, it highlights the untapped potential of women to spur U.S. innovation.

Overview of findings:

• Chinese residents significantly increased their collaboration on U.S. patents while decreasing their single-inventor patents. The share of Chinese-invented patents that were collaborative grew from 54 to 73% between 2000 and 2016.
• Most of this growth is due to greater collaboration among Chinese inventors. However, the share of foreign-collaborative patents with U.S. and European inventors also rose over the past decade. This share decreased for Taiwan, Hong Kong, and Macau collaborators.
• Chinese entities own the largest share of U.S. patents with Chinese inventors. The share of patents (at least) partially owned by the Chinese reached 65% by 2016, while the share of patents (at least) partially owned by non-Chinese assignees declined to 40%.
• At less than 10%, Chinese own the lowest share of U.S. patents issued to teams of Chinese and US-based inventors.
• For patents with at least one non-Chinese owner, the trend over the past several years shows a move away from Taiwan/Hong Kong/Macau-based owners to owners from other regions, especially the U.S. and European Union.

Intellectual Property and the U.S. Economy: 2016 Update
September 2016
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Patent Litigation and USPTO Trials: Implications for Patent Examination Quality
January 2015
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Patent Backlogs, Inventories and Pendency: An International Framework
June 2013
Co-authored with the United Kingdom Intellectual Property Office
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Intellectual Property and the U.S. Economy: Industries in Focus
March 2012
Co-authored with the Economics and Statistics Administration
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International Patent Protections for Small Businesses
January 2012
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Report on the Prior User Rights Defense
January 2012
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