How important is information disclosure through patents for subsequent innovation? To investigate this question, we examine the expansion of the USPTO Patent and Trademark Depository Library system from 1975 to 1997. While the exclusion rights associated with patents are national in scope, the opening of these patent libraries in a period before the internet yielded regional variation in the costs to access the technical information (prior art) disclosed in patent documents. We find that after a patent library opens, local patenting increases by 17% relative to control regions that have Federal Depository Libraries. The facts that the response to patent libraries is greatest among young companies, that library opening induces local inventors to cite more geographically distant and more technologically diverse prior art, and that the effect vanishes after the internet is introduced are consistent with the prospect that information disclosed in the patent documents is driving the paper’s core findings. In additional analyses, we find that library opening is associated with an increase in local business formation and job creation. Taken together, our analyses provide evidence that the information disclosed in patent prior art plays an important role in supporting cumulative innovation.
