Are Foreigners Treated Equally under the Trade-Related Aspects of Intellectual Property Rights Agreement?

Is there a systematic bias against foreign firms in patent examination decisions across major patent offices?

We care because enforcing the national treatment principle under the TRIPS Agreement is crucial for maintaining an equitable international patent system. When local and foreign applicants are not treated equally, this can discourage foreign investment, stifle international trade, and ultimately reduce incentives for innovation. Understanding whether this bias exists and what its implications are can help us inform policy decisions aimed at improving the global patent landscape and fostering fair competition in technology sectors.

We analyzed patent examination data from 2000 to 2014 from five major patent offices (EPO, USPTO, JPO, KIPO, CNIPA), encompassing a total of 1,195,210 applications across 510,759 patent families. These data were analyzed using fixed-effects regression models to control for invention quality, assessing differences in examination outcomes between local and foreign applicants. We also examined whether filing through the Patent Cooperation Treaty affects the likelihood of receiving a patent grant.

We confirmed a bias against foreign applications at all five patent offices, with local applicants enjoying a probability increase of grants by 10.5–22.2 percentage points. In addition, our regression results indicate that the EPO and KIPO exhibit the highest levels of bias against foreign applications. Furthermore, while using the PCT route increases the probability of grants for foreign applicants, it does not eliminate the disadvantage entirely relative to local applicants.

• 1,931,041 applications from 2000–2006, reducing to 1,195,210 after exclusions for status-missing members and single member families
• Across five major patent offices: EPO, USPTO, JPO, KIPO, and CNIPA

• The quality of the underlying invention is systematically controlled for in examination decisions
• Bias in the grant likelihood is due to the applicant's country of residence once invention quality is accounted for
• Fixed effects capture all factors related to the invention's quality that are common across jurisdictions