Discrimination against foreigners in the patent system : evidence from standard-essential patents

This paper tests for traces of discrimination against foreign firms in the patent prosecution process. It focuses on the case of China and looks specifically at patent applications declared as essential to a technological standard. The choice of standard-essential patents (SEPs) is particularly suited because of the ‘strategic’ importance of such patents for China’s indigenous innovation program. We exploit information on the timing of disclosure as SEP (before or after the patent application enters examination) to infer the likely presence of discrimination. We find that patent applications by foreign firms are treated unfavorably when examiners know that they are declared as standard essential. We interpret this result as a case of technology protectionism.