Does patent fee reform lower the bar? Evidence from the deferred patent examination system in Japan

The patent fee system is a substantial policy tool that enables the quality control of patents. In this study, we empirically examine whether the 2011 patent reform in Japan, which reduced the level of patent examination fees, has had a negative effect on the quality of pre-examination patents and post-examination patents. Using a difference-in-differences approach with comprehensive Japanese patent data, we find that even if there has been a negative effect of the 2011 patent reform on the quality of pre-examination patents, its impact has been very limited. In contrast, we find no negative effect of the 2011 patent reform on the quality of post-examination patents. We also find that the negative impact of the 2011 patent reform can be observed only in the lower tail of the patent quality index distribution, not in the upper tail. Thus, we conclude that the detrimental effect of the reform on patent quality in Japan has been negligible.