Stronger protection or technological revolution: what is behind the recent surge in patenting?

We investigate the cause of an unprecedented surge of U.S. patenting over the past decade. Conventional wisdom points to the establishment of the Court of Appeals of the Federal Circuit by Congress in 1982. We examine whether this institutional change, which has benefited patent holders, explains the burst in U.S. patenting. Using both international and domestic data on patent applications and awards, we conclude that the evidence is not favorable to the conventional view. Instead, it appears that the jump in patenting reflects an increase in U.S. innovation spurred by changes in the management of research.