This book provides a thorough analysis of the decision to apply for a patent. Unlike many other theoretical approaches, the negative effect a patent may have due to the disclosure requirement linked to every patent application is taken into account. Seen in this light, the effects driving the propensity to patent can be identified as the opposing forces of a protective and a disclosure effect.The theoretical investigation includes an analysis of patenting behavior in a setting with vertically and horizontally differentiated products. Due to imperfect patent protection competitors of the patentee may enter the market for the innovative product despite a patent. An empirical investigation of the theoretical results with data from the 2005 Mannheim Innovation Panel in combination with patent information from the European Patent Office provides strong evidence for the main conclusions.

Zusammenfassung
Firms do not patent every invention. In many cases they rather rely on trade secrecyorothernon-legalmeanstoprotecttheirintellectualproperty,i. e. the returns on their investments in research and development (R&D). A patent confers to its ownerthe exclusiverights to prevent third parties frommaking, using, o?ering for sale, selling, or importing for these purposes the patent protected product (Art. 28, Agreement on Trade-Related Aspects of Int- lectual Property Rights (TRIPs)). In exchange for the temporary monopoly which is securedby this protection,the patentee has todisclose the invention in a manner su?ciently clear and complete for it to be carried out by a p- son skilled in the art (Art. 83, European Patent Convention (EPC)). Thus every patent has the drawbackof a possible loss of a technologicalleadership caused by the mandatory disclosure of formerly proprietary knowledge. The patentee has to fear that this transfer of enabling knowledge included in the patent description may bene?t his rivals by facilitating their rapid catch-up. The relevance and actual enforcement of the disclosurerequirement is und- lined by the European Commissions Green Paper on Innovation (European Commission (1996)). In the so-called Route of Action 8 on the promotion of intellectual and industrial property it is stated that a desirable action should be thepromotion of patent information services as a method of technology watch based, in particular, on the information system set up by the European Patent O?ce(European Commission (1996), p. 42).

Inhalt
The Decision to Patent with Vertical Product Differentiation.- An Empirical Investigation of the Decision to Patent with Vertical Product Differentiation.- The Decision to Patent with Horizontal Product Differentiation.- An Empirical Investigation of the Decision to Patent with Horizontal Product Differentiation.- Summary and Discussion.