Strategic Scientific Disclosure : Evidence from the Leahy-Smith America Invents Act

We examine the impact of technological competition on voluntary innovation disclosure around the enactment of the Leahy-Smith America Invents Act of 2011 (“AIA”). The AIA moves the U.S. patent system from the first-to-invent to first-inventor-to-file system and induces a patent “race” that increases technological competition. Laggard firms are slow to file a patent and are disadvantaged in this race. We find that laggard firms file fewer patents and increase the concentration of their patents in fewer technology areas. Laggard firms respond to the AIA by strategically increasing scientific publications in an attempt to block competitors from obtaining a patent. This effect is more pronounced among firms 1) most affected by the AIA; 2) with financial constraints; and 3) whose competitors have a lower cost of entry. We find that peers of laggards experience greater patent filing rejections for novelty and obviousness reasons after the AIA, suggesting this strategy is effective