International Harmonization of the Patent-Issuing Rules

With the America Invents Act of 2011, the U.S. changed its patent-issuing rule from first-toinvent to first-to-file, the international norm. We investigate the effect of such a policy change in a two-country model of R&D competition for two sequential (basic and final) inventions. We find that a switch never speeds up basic research. A delay is more likely especially in industries where the final product generates more value in the U.S. Simulations show that a delay in basic research also retards final invention, decreasing world welfare