Regulatory laws are intended to produce socially desirable outcomes. In particular, the granting of patent protection is intended to encourage the creation of incentives for firms to undertake Research and Development and the acceleration of innovation through the disclosure of inventions. The choice of trade secrecy over patenting is a well documented phenomenon. Since this decision has an impact on future innovations and the competitiveness of rivals, it is important to determine why this choice is made and how a particular patenting arrangement affects the choice. Similar issues arise in conjunction with the novelty requirement. Specifically, Drs. Green and Scotchmer develop game theoretic models to study incentives for disclosure in patent races, as they depend on two legal requirements for patentability; namely, (1) the stringency of the novelty requirement and (2) whether the patent can issue if the applicant was "first to file," but not "first to invent." Little research has been conducted on the structure of the patent system; yet, its impact on innovation and the importance of continuing innovation in today's economy suggest the utility of such research. The project has the potential to contribute to the development of theory which will serve to increase our understanding of the effects of law in regulating competitive relationships. This research can also provide normative guidelines for the development of commercial law in an area where economics and law intersect.
