Novelty and Disclosure in Patent Law

TLDR

Patent novelty stringency influences innovation speed and research profitability by shaping technical disclosure among firms, with first‑to‑invent in the U.S. and first‑to‑file elsewhere governing patent assignment.

Abstract

The stringency of the novelty requirement in patent law affects the pace of innovation because it affects the amount of technical information that is disclosed among firms. It also affects ex ante profitability of research. We compare weak and strong novelty requirements from the standpoint of social efficiency. We ask how our answer depends on the rule that determines which firm gets a patent when two firms have patents pending on the same technology. The possible rules are first-to-invent, which applies in the U.S., and first-to-file, which applies everywhere else.