Strategic Non-disclosure in Patents

Patent law requires the full, clear, and concise disclosure of an invention in exchange for the protection of the intellectual property. This paper presents a theoretical analysis of the strategic motives to limit knowledge disclosure in patents and how this affects follow-on innovation. Using USPTO patent examination data we use Office actions associated with insufficient disclosure to investigate whether and how the modification of a patent specification in the course of examination impacts follow-on innovation. We find that inventors "game the system" using strategic non-disclosure as a means to reduce follow-on innovation.