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The Consequences of Invention Secrecy: Evidence from the USPTO Patent Secrecy Program in World War II

Daniel P. Gross

NBER Working Paper No. 25545
Issued in February 2019, Revised in May 2019
NBER Program(s):Program on the Development of the American Economy, Law and Economics Program, Productivity, Innovation, and Entrepreneurship Program

This paper studies the effects of the USPTO's patent secrecy program in World War II, under which over 11,000 U.S. patent applications were issued secrecy orders which halted examination and prohibited inventors from disclosing their inventions or filing in foreign countries. Secrecy orders were issued most heavily in high-tech areas important to the war effort – such as radar, electronics, and synthetic materials – and nearly all rescinded at the end of the war. I find that compulsory invention secrecy reduced follow-on invention and restricted commercialization, but as part of the security policies in place during the war it appears to have been effective at keeping sensitive technology out of the public view. The results shed light on the consequences of invention secrecy, which is widely used by inventors to protect and appropriate the returns to innovation, and yield lessons for ongoing policy discussions over potential measures to protect U.S. inventors against the growing incidence of foreign IP theft today.

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Document Object Identifier (DOI): 10.3386/w25545

 
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