The standard result in patent policy, as demonstrated by Gilbert and Shapiro (1990), is that infinitely lived but very narrow patents are optimal as deadweight losses are minimized and spread through time, but inventors can still recover their R&D expenditures. By extending their innovative...

A socially optimal structure of application and renewal fees for patents would encourage the maximal number of applications while reducing effective patent length. We find, however, that when patent offices are required to be self-funding, resource constraints can distort this fee structure....