📈 economics

Racing to file: Patent priority rules, technological competition and firm patenting after the America Invents Act

This paper finds that the America Invents Act's shift to a first-inventor-to-file rule intensified firms' patent filing races in highly competitive technology sectors, leading to a surge in applications without a corresponding broad increase in invention quality or R&D spending.

Original authors: Kirill Proskurin

Published 2026-11-03

📖 5 min read🧠 Deep dive

CC BY 4.0

Original authors: Kirill Proskurin

Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). ✨ This is an AI-generated explanation of the paper below. It is not written or endorsed by the authors. For technical accuracy, refer to the original paper. Read full disclaimer

In the world of innovation, a patent is a temporary shield. It gives an inventor the exclusive right to sell a new idea, protecting them from competitors who might otherwise copy the work without paying. This protection is meant to encourage companies to invest in research, knowing they can eventually profit from their discoveries. However, the rules that decide who gets this shield are just as important as the shield itself. For a long time, the United States operated under a unique system where the person who could prove they had the idea first would win, even if someone else had filed the paperwork earlier. This created a complex legal landscape where inventors had to keep detailed records of their thoughts and experiments to prove they were the original creators. In 2013, the United States changed this rule to match the rest of the world: the person who files the paperwork first now wins, regardless of when the idea actually occurred. This shift turned the patent system into a race against the clock, where speed in filing documents became the primary way to secure rights.

A researcher named Kirill Proskurin set out to understand how this change in the rules altered the behavior of large companies. He wanted to know if the new system simply encouraged more invention, or if it changed the way companies competed against each other. To find the answer, he looked at the years before and after the rule change, focusing on different fields of technology. He reasoned that in areas where many companies were already working on similar ideas at the same time, the new rule would matter the most. In these crowded fields, the risk of a rival filing first is high, so the pressure to be the first to submit paperwork should be intense. By comparing these highly competitive fields with less crowded ones, he could see how the new law changed the strategies of American firms.

The study examined data from thousands of publicly traded companies between 2007 and 2016. Proskurin measured how much competition existed in specific technology categories before the law changed, using a method that looked at how many different companies were filing patents in each area. He then tracked how the number of patent applications changed after the new rule took effect. The results showed a clear and strong pattern: in technology fields where competition was already high, companies filed significantly more patent applications after the reform. Specifically, moving from a field with average competition to one with high competition was associated with a 22 percent increase in applications among companies that were already active in those areas. This surge happened even within the same company and the same year, suggesting that firms were deliberately shifting their efforts toward their most competitive battles.

Interestingly, this rush to file began before the new law officially took effect. The data showed that companies started increasing their filings as early as 2010, when the direction of the legal change became clear to everyone. This indicates that businesses were forward-thinking, adjusting their strategies the moment they realized the old rules were ending. The increase in filings was not just a flood of paperwork that got rejected later; the number of patents actually granted also rose in these competitive fields, particularly in physics, chemistry, and electricity. However, the study found that this increase in quantity did not come with a clear increase in quality. While the number of highly important, frequently cited patents did go up, the average patent did not become broader or more impactful. The extra patents did not represent a massive wave of new inventions, but rather a strategic move to secure positions in existing battles.

The research suggests that the new rule changed the nature of the competition itself. Instead of focusing on creating entirely new technologies, companies began to race harder to file for the technologies they were already working on. The study found that companies facing high competition in their fields actually entered fewer new technology areas and spent less on research and development after the reform. This points to a shift in strategy: firms were prioritizing the speed of filing over the exploration of new ground. They were building thicker patent portfolios to defend their current territory rather than venturing into uncharted territory. The study also noted that a significant portion of the increase in granted patents came from a specific type of filing called a continuation, which allows a company to keep a patent application open and modify it later. This further supports the idea that companies were using the system to maintain their hold on existing ideas rather than generating a broad increase in new knowledge.

Ultimately, the findings suggest that changing the procedural rules of the patent system can have profound effects on how companies compete. The shift to a "first-to-file" system made the race to the patent office more intense, especially in fields where rivals are close. While this may have simplified the legal process and encouraged earlier disclosure of inventions, it also appears to have encouraged companies to focus on securing their existing positions rather than expanding their research horizons. The study concludes that while the reform achieved its goal of making priority more predictable, it also altered the incentives for innovation, pushing firms to compete more on the speed of their paperwork than on the creation of new knowledge. For policymakers, this highlights that the design of patent procedures is not just a bureaucratic detail, but a powerful force that shapes the very way companies compete in the marketplace of ideas.

Technical Summary: Racing to File: Patent Priority Rules, Technological Competition and Firm Patenting after the America Invents Act

Problem and Motivation
This paper investigates how the shift in US patent priority rules from "first-to-invent" (FTI) to "first-inventor-to-file" (FITF) under the Leahy–Smith America Invents Act (AIA) altered firm behavior. Prior to March 2013, the US allowed inventors to prove an earlier invention date to secure priority even if a rival filed first. The AIA replaced this with a system where the filing date generally determines priority. The central hypothesis is that this change increased the cost of filing late, thereby intensifying "patent races" specifically in technology areas where multiple firms work on similar inventions simultaneously. The paper asks whether this procedural change led to a broad increase in innovation or merely a strategic acceleration of filing in competitive fields.

Methodology
The study employs a continuous difference-in-differences (DiD) design using a firm–Cooperative Patent Classification (CPC) subclass–year panel of US publicly traded firms for the period 2007–2016.

Data Sources: The analysis integrates firm-level patent records from DISCERN 2.0 (linking USPTO patents to publicly traded R&D firms), patent classification and citation data from PatentsView, and financial data from Compustat.
Treatment Variable: The intensity of the treatment is defined by the level of pre-reform technological competition in each CPC subclass. This is measured as $1 - HHI$ , where the Herfindahl–Hirschman Index (HHI) is calculated based on the application shares of firms within a subclass during the pre-reform period (2007–2010).
Empirical Strategy: The baseline specification estimates the interaction between a post-reform time dummy (2013–2016) and the pre-reform competition measure. The model includes firm, class, and year fixed effects, with standard errors clustered by firm and class.
- Extensions: The analysis includes firm $\times$ year fixed effects to isolate variation within a firm's portfolio across different classes in the same year. An event-study design tracks dynamics from 2007 to 2016, treating 2009 as the base year.
- Outcomes: The primary outcomes are the log of patent applications and the log of granted patents (dated by filing year). Secondary outcomes include patent quality metrics (claims, forward citations, highly cited patents), technological breadth (entry into new classes), and R&D expenditure.

Key Results

Increased Filing in Competitive Fields: Following the AIA, patent applications and grants increased significantly more in technology classes with higher pre-reform competition. Moving from the 25th to the 75th percentile of pre-reform competition is associated with approximately a 22% increase in applications among active filers.
Anticipation and Timing: The response began before the rule took legal effect. Event-study coefficients show a divergence starting in 2010, when the direction of the reform became clear, and strengthening through the transition period (2011–2012).
Heterogeneity by Field: The effect is concentrated in technology-intensive fields prone to simultaneous invention, specifically Physics (Section G), Chemistry and Metallurgy (Section C), and Electricity (Section H). The effect is small or insignificant in traditional fields like Mechanical Engineering and Textiles.
Quality and Scope: Average patent quality (measured by average claims and average citations) did not clearly improve. While the number of highly cited patents rose, total claims and citations increased largely in proportion to the increase in volume.
Strategic Behavior:
- Continuation Filings: A significant portion of the grant response is driven by continuation, divisional, and continuation-in-part filings, suggesting firms are using these mechanisms to secure early priority dates and extend protection.
- Reduced Exploration: Firms more exposed to competitive classes became less likely to enter new technology subclasses and reduced their overall R&D spending.
- Intensive vs. Extensive Margin: The results primarily reflect an intensive margin response (filing more in existing areas) rather than an extensive margin response (entering new areas).

Significance and Contributions
The paper contributes to three distinct literatures:

Evaluation of the AIA: Unlike previous studies focusing on firm size or litigation exposure, this paper demonstrates that the filing response is driven by the intensity of technological competition. It follows the consequences of this response on grants, quality, and investment.
Innovation and Competition: It provides empirical evidence on how a specific procedural rule (priority determination) alters the form of rivalry. The findings align with the "escape-competition" logic but suggest that under FITF, the race shifts toward filing speed rather than invention depth.
Patent Race Theory: The results support theoretical concerns that patent races can lead to resource misallocation. The reform appears to have induced firms to race harder to file in areas where they were already active, potentially at the expense of broader R&D investment and technological exploration.

Limitations and Claims
The author notes that the estimates describe the intensive margin of publicly traded firms already active in a class; the response of new entrants or small firms is not captured. The competition measure is based on public firms, which may overstate concentration in some subclasses. Furthermore, the short pre-reform period (due to anticipation starting in 2010) limits the power of parallel trend tests.

The paper concludes modestly that the AIA's FITF rule changed the timing and organization of patenting more than the amount of invention. While the rule may simplify priority disputes and accelerate disclosure, it appears to have encouraged firms to compete more aggressively on filing speed and portfolio density in contested fields, rather than stimulating a broad increase in new knowledge creation.

Technical Summary: Racing to File: Patent Priority Rules, Technological Competition and Firm Patenting after the America Invents Act

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