Dr. Stefan M. Wagner ist wissenschaftlicher Assistent von Prof. Dietmar Harhoff, Ph.D., am Institut für Innovationsforschung, Technologiemanagement und Entrepreneurship der Universität München.

Foreword 6
Acknowledgements 8
Table of Contents 10
List of Figures 12
List of Tables 14
Chapter 1 Introduction 15
Bibliography 21
Chapter 2 Modeling Probabilities of Patent Oppositions in a Bayesian Semiparametric Regression Framework 23
2.1 Introduction 23
2.2 Opposition Mechanism of the European Patent Office 25
2.2.1 Institutional Background 25
2.2.2 Empirical Analysis of EPO Patent Opposition 26
2.3 Bayesian Semiparametric Binary Regression 29
2.3.1 Structural Assumptions 29
2.3.2 Bayesian Inference via Markov Chain Monte Carlo 32
2.4 Analysis of Patent Opposition at the EPO 34
2.4.1 Empirical Results for Metrical Covariates 36
2.4.2 Regression Results Based on Training Data 36
2.4.3 Model Validation 40
2.5 Conclusions and Outlook 43
Bibliography 44
Chapter 3 The Duration of Patent Examination at the European Patent Office 47
3.1 Introduction 47
3.2 Institutional Background: Patent Applications at the European Patent Office 50
3.3 Theoretical Background 52
3.3.1 Previous Studies and Normative Issues 52
3.3.2 Determinants of Decision-Making Lags at the European Patent Office 55
3.4 Data and Descriptive Statistics 56
3.4.1 Data Source 56
3.4.2 Variables 57
3.4.3 Descriptive Statistics 60
3.5 Survival Analysis 70
3.5.1 Model Specification 70
3.5.2 Results 72
3.6 Conclusion 80
Bibliography 81
Chapter 4 Business Method Patents in Europe and their Strategic Use — Evidence from Franking Device Manufacturers 83
4.1 Introduction 83
4.2 Business Method Patents - A Summary of the Current Debate 84
4.3 Legal Framework 89
4.3.1 The Patentability of Business Methods under the European Patent Convention 89
4.3.2 The Patentability of Business Methods under the US Code 91
4.4 Analysis of European Business Method Patents 93
4.4.1 Research Design and Data Description 93
4.4.2 Applications and Applicants of Business Method Patents at the European Patent Office 96
4.4.3 Patent Characteristics 101
4.4.4 Post- Grant Opposition Procedures 105
4.5 Strategic Use of Business Method Patents: The Case of Franking Machines 107
4.5.1 Market Structure 107
4.5.2 Patent Strategies 109
4.5.3 Multivariate Analysis of Oppositions against Patent Grants 112
4.6 Conclusion 115
Bibliography 117
Chapter 5 An Empirical Analysis of Make-or-Buy Decisions in Patenting 121
5.1 Introduction 121
5.2 Outsourcing of IP- Related Business Services 124
5.2.1 IP- Management in Corporations 124
5.2.2 Make-or-buy Decisions Concerning Patent Related Services 126
5.2.3 Legal Constraints to Vertical Integration 127
5.3 Theoretical Background and Hypotheses 128
5.4 Data and Descriptive Statistics 132
5.4.1 Data Source and Variables 132
5.4.2 Descriptive Statistics 135
5.5 Multivariate Panel Analysis 143
5.5.1 Model Specification 143
5.5.2 Results 145
5.6 Conclusions and Future Research 148
Bibliography 150

Chapter 1 Introduction (p.1 )

Since its creation more than 200 years ago, the patent system has played an important role in stimulating technological innovation by providing legal protection to inventions of every description and by disseminating useful technical information about them (Machlup k Penrose 1950, Scotchmer 2005). Driven by the growing importance of technology to a nations well-being over the last century, the role of patents in the economy becomes increasingly important. Ever-growing numbers of patent applications are a clear indication that firms of all sizes as well as universities and public institutions are ascribing greater value to patents and are willing to bear higher costs to acquire, exercise and defend them in court (National Research Council 2004).

While the patent system has had to adapt to changing conditions throughout its entire history, there have been major changes to the patent system over the last decades. Since the end of the seventies a series of judicial, legislative and administrative actions have changed the international patent systems in distinctive ways. In 1978 the European Patent Office (EPO) - established by the Convention on the Grant of European Patents (EPC) signed in Munich 1973 - started its operations and marked the beginning of a unified European patent system. Employing a centralized examination/ grant procedure as well as a centralized post-grant opposition mechanism, the EPO offers applicants a cost-effective and time-saving way of applying for patent protection in up to currently 36 European countries at once. Additionally, it enables third parties to object against patent grants directly at the EPO within nine months after the patent has been granted instead of turning to national courts (Harhoff &, Reitzig 2001, 2004).

In the United States the establishment of the Court of Appeals for the Federal Circuit in 1982, which consolidated all appeals from patent case decisions of federal district courts in a single specialized court, led to a sharp increase in plaintiff success rates in patent infringement law suits and possibly to a rise in the economic value of patents (National Research Council 2004). In addition to this major institutional changes, patenting has been extended to new scientific and technological domains such as life forms, genes, software and methods of doing business. Due to these changes - strengthening of patent holders position by institutional changes and extension of patentable subject matter - it can be assumed that patents are being more actively sought and vigorously enforced by innovators (Cohen Sz Merrill 2003, National Research Council 2004).

The tremendous increase in the demand for patents (even called the patent explosion by Hall 2004) and the recent expansion of patentable subject matter create new challenges, both to patentees and to patent offices. First, the sheer volume of applications to patent offices - currently more than 150.000 a year at the EPO - threatens to overwhelm the patent examination corps, influence the quality of their work or create a huge backlog of pending cases. Second, various technological fields are currently characterized by prevailing uncertainty on the patentability of inventions which possibly influences market structures in an unfavorable way.

For instance, if some firms possess the capabilities to get patents granted despite unresolved legal questions concerning the patentability of the underlying inventions and others do not, these firms might take advantage of it.