New study on the impact of patent disclosure on follow-on inventions

© 2024 EPFL

© 2024 EPFL

A new study titled "Do patents enable disclosure? Evidence from the Invention Secrecy Act" by Gaétan de Rassenfosse (EPFL), Gabriele Pellegrino (Università Cattolica del Sacro Cuore), and Emilio Raiteri (Eindhoven University of Technology) has been published in the International Journal of Industrial Organization. It delves into the complex relationship between patent secrecy and knowledge dissemination.

The patent system, a cornerstone of scientific advancement, plays a dual role: it secures inventors’ rights and promotes knowledge sharing. Understanding how this system influences the spread of new ideas is crucial in today’s fast-paced innovation landscape.

“We usually do not observe inventions kept secret, making the study of the effect of secrecy particularly challenging,” notes Gaétan de Rassenfosse. Utilizing the Invention Secrecy Act of 1951, this study provides a unique lens into how patents aid knowledge dissemination. The Act gives the U.S. Commissioner for Patents the authority to prevent the disclosure of new inventions that may threaten national security. This context allowed the authors to explore the effect of secrecy on subsequent inventions. “Inventions subject to a secrecy order are kept secret for a limited period, after which they are disclosed to the world through the patent system,” adds de Rassenfosse. This peculiarity of the patent system allows the authors to study the effect of disclosure (or lack thereof).

Secrecy orders on patents significantly hinder the emergence of new inventions. This ‘lost generation’ of inventions remains a reality even post-secrecy, a critical insight for policymakers and innovators alike. de Rassenfosse explains that “the knowledge creation process has taken a different path, highlighting the true cost of secrecy.”

The findings of this study have profound implications for innovation and intellectual property policy. The authors demonstrate that the disclosure within the patent system fosters the generation of follow-on inventions. The study also highlights one of the social costs associated with secrecy: a notable reduction in the generation of follow-on inventions. “While our results are limited to a particular set of patents, they remind us that disclosure facilitates follow-on inventions. We could extend this reasoning to access to knowledge in general, with broader accessibility implying broader dissemination,” concludes de Rassenfosse.