The Hidden Value of Abandoned Applications to the Patent System

Some inventors abandon their patent applications without ever receiving a patent. Although patent scholars view such abandoned applications as essentially worthless, we question that conventional wisdom. In conducting an empirical analysis of a recently released patent application dataset (in light of a 1999 change requiring publication of most abandoned applications), we find that the United States Patent and Trademark Office (USPTO) often uses abandoned applications as prior art when examining future patent applications. Abandoned applications thus generate an administrative disclosure that prevents the issuance of broader patent rights to later applicants. By narrowing the scope of new patents, abandoned applications perform a public service in limiting exclusivity over any given technological space and opening up more invention space to the public domain, but they do so at an enormous private cost to the abandonee—benefits and costs that have yet to be fully accounted for in the literature.