International Spillovers between Patent Examination Results:
Evidence from Triadic X/Y Citations*
Overseas Researcher: Tetsuo WADA **This study detects and measures the influence (spillover) of patent examinations from Europe
to the U.S., by way of comparing examiner patent citations that constitute the reason for refusal.
Among patent examination standards, novelty and inventive step are very close in all three regionsof Europe, the U.S., and Japan. This paper offers preliminary analysis on coincidences between“rejection citations” (i.e., those cited as grounds for rejections) added by the United States Patent
and Trademark Office (USPTO) and “X/Y patent citations,” which are also added as grounds forrejections at the European Patent Office (EPO) within the same patent family, based on more thanforty thousand families of triadic application sample. We consider the timing of release of European
search reports and the timing of rejection actions by the USPTO for the same family of patentapplications. We find that the frequency of rejection (X/Y-equivalent) citation coincidences between
the USPTO and the EPO generally increase after the release of European search reports. Thissuggests that the U.S. examiners capture spillovers of search efforts from the EPO; that is, the
USPTO examiners rely on prior art information collected and disclosed by the EPO.

I. Background and research question
When a family of international patent applications is examined in many jurisdictions, a seriesof prior art search for the same invention is conducted separately by different patent offices in eachjurisdiction. As a result, separate citations are added to the same family of patent applications acrosspatent offices. As Wada (2018) has revealed, patent examiners at the trilateral offices of the EPO, the
USPTO, and the Japan Patent Office (JPO) tend to cite different prior arts to reject applications inthe same patent families, despite the fact that the general patentability criteria of novelty andinventive step are close together. On the other hand, examiners can refer to the results of searchoutcomes conducted at other offices, conditional on its availability. Thus, there are opportunities for
examiners to utilize the same prior art, if prior search outcomes become available for them. We can* This is a summary of the report published under the 2019 Collaborative Research Project on Harmonization of Industrial Property

Right Systems under a commission from the Japan Patent Office.

** Professor, Gakushuin University, Faculty of Economics at Max Planck Institute for Innovation and Competition as Overseas

Researcher under the Program.

icall this examination spillovers between patent offices.
There is very limited existing knowledge on how examiners in a patent office rely on priorcitations generated by other offices. This paper proposes to track examiner citations, especially thosefor rejections, across patent offices. Generally, we can evaluate whether an examiner of one officeutilizes the same prior art as another for rejecting the same patent application. When the same patentcitation is employed sequentially at different patent offices, we can utilize the information to inferthat there are spillovers between patent examination results. I first summarize coincidences of X/Ycitations at the aggregate level. Then, those patent family citations added by the USPTO for the
purpose of rejection (i.e., rejection patent citations, or X/Y equivalents) are examined at the citationlevel. We examine whether each U.S. rejection citation coincides with X/Y cited families given by
European search reports (ESRs) for the same citing patent family, with special attention paid to thetiming of European search reports and office actions by the USPTO, along with several control
variables. By way of comparing USPTO rejection citations (at the level of international family-tofamily citations) with prior art search results conducted by the EPO before and after the release of
the ESRs, we can first make a reasonable inference concerning the existence of search result
spillovers from the EPO to the USPTO, leading to convergent citations.

II. Prior studies
While patent citations have been widely employed as research tools, the varieties within patentcitations, such as applicant citations and examiner citations, have also recently been studied. One of
the recent research frontiers is the distinction within examiner citations. While examiner citations
are considered to be noisy as a means for measuring knowledge flow between inventors, examiner
citations have been shown to have an advantage over inventor citations for measuring the value ofpatents (Hegde and Sampat 2009). Recently, examiner citation as a basis of rejection have been
gaining attention as an even better indicator of patent values (Cotropia and Schwartz 2018).
U.S. examiners should indicate specific prior art on which they rely as reasons for rejection,in particular for “102” novelty rejections and “103” obviousness rejections. That is, they must clearlyshow the reasons for an applicant’s rejection if it is attributable to prior art. At the USPTO, Section
706 “Rejection of Claims” of the Manual of Patent Examining Procedure (MPEP) states that “Inrejecting claims for want of novelty or for obviousness, the examiner must cite the best references
at his or her command.” There is no official name for this category of citations, but a recent work
(Cotropia and Schwartz, 2018) calls it a “rejection citation” or “rejection patent” if a corresponding
prior art is a patent. This data has been made available and is drawing attention by the recently
released office action database of the USPTO (Lu et al., 2017). However, to the best knowledge ofii

the author, there has been no previous work which tries to combine examiner patent citation data
across different jurisdictions, except the abovementioned article (Wada 2018).

III. Examination spillover: overview in the aggregate
This study takes advantage of a novel large-scale dataset of U.S. rejection patents obtained fromrejection documents available as file wrappers on the “Public PAIR” database of the USPTO tocompare patent citations employed by examiners as specific reasons for rejection. In other words, by
way of approximating citation categories of X/Y for the USPTO, we are now able to measure theconvergence and divergence of individual rejection reasons used by the two patent offices throughfamily-to-family citations. Combined with the U.S. rejection patent database, the EPO PATSTAT
database (Spring 2016 and Fall 2019) and EPO DOCDB (Backfile 2017 January version) have beenused.
The domain of statistical analysis is the set of X/Y citations and equivalents for triadic
applications through PCT and non-PCT applications. Triadic patent applications are defined here as
EPO DOCDB families that contain all of the EPO, USPTO, and JPO applications recorded in the
EPO’s PATSTAT database. The citations concern an EPO DOCDB family where only a single
DOCDB family ID is observed and where X/Y citations (and equivalents) are added by all of thetrilateral offices, representing a “twin applications approach.” The primary domain of the study iscomprised of 301,186 family citations recorded as X/Y equivalents at the USPTO, found for 43,207
cited triadic families that have single DOCDB family IDs and priority years 2003–2010.
A simple aggregate measurement for a particular citing family is the “EPO–USPTO familyto-family rejection citation coincidence ratio,” i.e., the ratio of coincidence of X/Y citations by theEuropean search reports over all rejection (i.e., X/Y-equivalent) citations added by the USPTO to
the same citing family. To obtain this “EPO–USPTO rejection family-to-family citation coincidence
ratio” for an application, we first list X/Y-equivalent U.S. rejection citations added to the applicationin chronological order during its prosecution history. The number of repeated rejections in its
prosecution history at the USPTO is also recorded. The same patent citation is often used repeatedly
in the same prosecution history at the USPTO, so there can be multiple records of the same citation
pair with different U.S. office action timing. We take the number of all these X/Y-equivalent U.S.
examiner citations for the application as the denominator of the ratio for the family of the application.
For each U.S. citation, we obtain a citation mapped onto a DOCDB citation pair from the PATSTAT
data. We obtain a dichotomy on whether a citation is also coded as X/Y category at the EPO within
the same family-to-family citation. When the European search report records the citation as X/Y, we
define the citation as a coincidental X/Y EPO citation pair with the USPTO X/Y equivalent. Then,iii

we take the number of all coincidental X/Y EPO search report citations for the citing family as thenumerator of the ratio.
The ratio equals one if all of the X/Y-equivalent citations at the USPTO are also coded as X/Yat the EPO in the same family. The ratio is zero if none of the X/Y equivalents at the USPTO for an
application are recognized as X/Y by the European search report. In summary, this measurement
indicates the proximity of a set of rejection citations employed by the USPTO to those X/Y citations
indicated by the EPO, in terms of a single family. A figure shows the averages of the citation
coincidence ratio over different sets of the sample, comprised of triadic applications with priority inthe EPC countries, those with priority in Japan, and those with priority in the U.S. (i.e., geographicalsources of applications from each of the trilateral offices). Each ratio is calculated according to twostages of U.S. citation timing: pre-ESR and post-ESR. As is evident from the figure, the ratio
increases after the release of European search reports, although the effect is not very obvious forapplications from the U.S. A simple interpretation of this would be that the U.S. examiners takeadvantage of the outcomes of European search reports, especially if an application is first madeoutside the U.S.

IV. Examination spillover at the level of family-to-family citation
To obtain more micro-level insights, we next focus on the dichotomy describing whether or
not a U.S. X/Y-equivalent is coded as belonging to the X/Y category at the EPO as well. By taking
this dichotomy as a dependent variable in logit regression, we can analyze correlating factors andtheir signs. The unit of analysis is a family-to-family citation given at the USPTO as an X/Yequivalent, with office action sequence data and other application-level attributes as explanatory
variables. Specifically, let us define yi as a dichotomy taking a value of one when a family of
rejection citation by the USPTO examiners to a triadic application family i coincides with a familyof X/Y citation added by the EPO search report. Then, the following model can be estimatedassuming that the function F() is a logistic cumulative distribution function. Vectors of explanatory
variables are represented by Xj and β is a coefficient vector such as: Pr (yi =1) =F (Xjβ).
We focus on key explanatory variables to analyze convergence and divergence of X/Y citations.
One variable is another dichotomy, US_action_after_EP_SEA_date. It takes a value of one when a
U.S. rejection citation was given at the USPTO after the release of the European search report(abbreviated as “EP SEA” on PATSTAT) for its EP family member application. Because of a “search
result spillover” effect, we predicted that the coefficient would be positive. Along with this “before
ESR” and “post ESR” distinction, we also employ another variable of the number of rejection actions
at the USPTO. This measures the total number of U.S. rejections for a particular rejection citationiv

within a prosecution history. Spillover from the EPO search report to the USPTO, if any, should
occur only once in a prosecution, since typically one European search report is issued for an
application. In contrast, rejection reasons could drift through exchanges of actions (e.g., amendments
as responses to past rejections), especially at the USPTO. To incorporate these processes, we employ
another key explanatory variable, US_rejection_counts, which is the number of rejections (non-final
and final) in a USPTO prosecution history. Because longer exchanges of rejections and responses
mean evolution of bargaining issues in a prosecution, we expect the coefficient for this variable tobenegative.

In

order

to

furtherincorporate

longitudinal

effect,we

also

employ“us_action_lag_from_appyear” which means the lag in years between the filing year and the officeaction year. We also predict the coefficient to be negative.
We employ a number of control variables. When an application in a sample is a PCT
application and its International Search Authority (ISA) is the EPO, we give a value of one for adummy variable ISA_EP, which means that a family has the EPO as its ISA. The PCT requires thata PCT application should be given an international search report prepared by a patent office.
Approximately half of PCT applications from the U.S. choose the EPO as their ISA, whereas most
PCT applications from Japan rely on the Japan Patent Office for their ISA, and European applicants
are required by rule to ask for search reports from the EPO only. In any case, European search reports
are issued for all triadic applications, but their issuance timing tends to become late when aninternational search report is already issued by another (non-EPO) ISA, and subsequently European
search report is issued as supplementary search report. In order to control for the timing differenceof search reports, this dummy variable ISA_EP is added. Within PCT applications, a dichotomy
isr_cited_dummy is added as indicating that a citation is also listed in international search reports(ISRs). At the EPO, ESR is the ISR for PCT applications, so this variable contains a multicollinearity
problem with the dependent variable if the domain is limited to the cases where ISRs are ESRs.
The location dummies for the first priority country, first_EP, first_US, and first_JP, areemployed in the full sample estimation. We also controlled for priority years (2003–2010) and theWorld Intellectual Property Organization (WIPO) 35 technology fields (WIPO 2017) of each family.
The variable techn_field_nr_counts is the number of WIPO technology fields covered by the family,
representing the breadth of the technology.
We mostly run logit estimations on the full sample as well as on a sub-sample of applications
from the EPC countries, Japan, and the U.S.
From the estimation results, EPO–USPTO family-to-family rejection citation coincidences are
consistently more likely to occur after a release of a European search report. That is, we observe
positive and significant coefficients for the explanatory variable, US_action_after_EP_SEA_date,indicating the convergence of U.S. rejection citations to EPO X/Y citations after the release ofv

European search reports.
The coefficients for us_rejection_counts are consistent throughout the results, being negativeand significant. As predicted, U.S. examiners employ different rejection reasons from those used by
the EPO on average, as prosecution takes longer. Therefore, we observe that the longer pendency
results in divergence of U.S. rejection citations from EP X/Y citations. The additional pendency
variable “us_action_lag_from_appyear” is also negative and significant for full sample, but notalways significant for subsamples.
The coefficient for the dummy isr_cited_dummy is consistently positive and significant, andits coefficient value is very high compared to other variables. When an ISR is issued, patent offices
can easily have access. Therefore, the coincidence is a necessary outcome. Put differently, even after
controlling for this ISR effect, US_action_after_EP_SEA_date has a positive and significant sign,
suggesting a stable spillover effect from the EPO to the USPTO.
The location dummies for the first priority country show that applications from the U.S. havelower coincidence ratios on average. With respect to technological fields, we do not observe
consistent patterns. The technological breadth variable techn_field_nr_counts also seems irrelevant.
“ISA_EP (EPO as an ISA)” added for PCT sample has positive and significant coefficient.
Results on limited sample ranges to each first filing region of the EPC countries, Japan andthe U.S. are also shown. According to the results, US_action_after_EP_SEA_date has a positive andsignificant sign, except in the “PCT from EPC countries only” sample and the “PCT from the U.S.
only” sample. As was discussed before, ESRs are the ISRs for PCT applications from the EPC
countries. Therefore, this variable isr_cited_dummy is very close to the dependent variable when we
focus only on PCT applications from the EPC countries. We still can interpret the results as that the
USPTO examiners follow the EPO search report in the “PCT from EPC countries only” sample.
In the U.S. PCT only sample, both isr_cited_dummy and ISA_EP have a positive andsignificant coefficient. Approximately half of PCT applications from the U.S. choose the EPO as
their International Search Authority. When the EPO prepares ISRs, we can interpret the results asthat the likelihood of the citation being incorporated with U.S. office action increases. When the
USPTO prepares ISRs, the variable US_action_after_EP_SEA_date is not significant, implying that
the USPTO examiners do not incorporate EP search reports. However, in this case, EP search reports
are supplementary reports, prepared after ISRs by the USPTO. Since the number of citations newly
added by the supplementary is smaller, the results are not inconsistent with the general tendency for
USPTO examiners to follow the EPO. We need to take note of this subsample, though, since U.S.
examiners may not find the outcomes of European search reports for US-based applications as
valuable as those for applications outside the U.S., possibly because examiners are more
knowledgeable about prior art concerning local applications.

viGenerally speaking, the overall results support a stable spillover effect from the EPO to the
USPTO, after controlling for many factors.

V. Conclusion and further issues
We generally find EPO–USPTO convergence of citations after European search report releases,
implying the existence of spillover from the EPO to the USPTO, with a small fraction of exception
where PCT applications are made from the U.S. with ISA being the U.S. The convergence of citations
after the release of European search reports implies that there is benefit in search effort taken by the
USPTO. Moreover, we find divergence of citations when prosecution takes longer. That is, we finddivergence of U.S. rejection patent citations from those at the EPO as the process of a prosecution
becomes longer, which is typically caused in the U.S. by persistent challenges from applicantsappealing repeated rejections. These results imply interdependence between major patent offices
with both converging and diverging forces, which have been found by a novel use of examiner patentcitations. The finding suggests that there is benefit in collaborative search mechanisms between
patent offices, which have policy implications (such as international search collaborations to reduce
discrepancies between grant decisions). Moreover, it has an implication for citation study beyond
patent citation study, in that sequential reviews of prior arts with respect to the same citing documents
could result in different citation network structures, dependent on the possibility of information
sharing between different citing entities.

vii