The System of Patent-Granting, Which Confers Temporary Monopolies GMAT Reading Passage Comprehension

Reading Passage Comprehension

The system of patent-granting, which confers temporary monopolies for the exploitation of new technologies, was originally established as an incentive to the pursuit of risky new ideas. Yet studies of the most patent-conscious business of all—the semi-conductor industry—suggest that firms do not necessarily become more innovative as they increase their patenting activity. Ziedonis and Hall, for example, found that investment in research and development (a reasonable proxy for innovation) did not substantially increase between 1982 and 1992, the industry's most feverish period of patenting. Instead, semiconductor firms simply squeezed more patents out of existing research and development expenditures. Moreover, Ziedonis and Hall found that as patenting activity at semiconductor firms increased in the 1980's, the consensus among industry employees was that the average quality of their firms' patents declined. Though patent quality is a difficult notion to measure, the number of times a patent is cited in the technical literature is a reasonable yardstick, and citations per semiconductor patent did decline during the 1980's. This decline in quality may be related to changes in the way semi-conductor firms managed their patenting process: rather than patenting to win exclusive rights to a valuable new technology, patents were filed more for strategic purposes, to be used as bargaining chips to ward off infringement suits or as a means to block competitors' products.

“The System of Patent-Granting, Which Confers Temporary Monopolies”- is a GMAT reading comprehension passage with answers. Candidates need a strong knowledge of English GMAT reading comprehension.
This GMAT Reading Comprehension consists of 5 questions and answers. The GMAT Reading Comprehension questions are designed for the purpose of testing candidates’ abilities in understanding, analyzing, and applying information or concepts. Candidates can actively prepare with the help of GMAT Reading Comprehension Practice Questions.

Solution and Explanation

1. The passage is primarily concerned with discussing

(A) a study suggesting that the semiconductor industry’s approach to patenting during the period from 1982 to 1992 yielded unanticipated results
(B) a study of the semiconductor industry during the period from 1982 to 1992 that advocates certain changes in the industry’s management of the patenting process
(C) the connection between patenting and innovation in the semiconductor industry during the period from 1982 to 1992
(D) reasons that investment in research and development in the semiconductor industry did not increase significantly during the period from 1982 to 1992
(E) certain factors that made the period from 1982 to 1992 a time of intense patenting activity in the semiconductor industry

2. The passage suggests which of the following about patenting in the semiconductor industry during the period from 1982 to 1992 ?

(A) The declining number of citations per semiconductor patent in the technical literature undermines the notion that patenting activity increased during this period.
(B) A decline in patent quality forced firms to change the way they managed the patenting process.
(C) Increased efficiencies allowed firms to derive more patents from existing research and development expenditures.
(D) Firms’ emphasis on filing patents for strategic purposes may have contributed to a decline in patent quality.
(E) Firms’ attempts to derive more patents from existing research and development expenditures may have contributed to a decline in infringement suites.

3. The passage makes which of the following claims about patent quality in the semiconductor industry?

(A) It was higher in the early 1980’s than it was a decade later.
(B) It is largely independent of the number of patents granted.
(C) It changed between 1982 and 1992 in ways that were linked to changes in research and development expenditures.
(D) It is not adequately discussed in the industry’s technical literature.
(E) It was measured by inappropriate means during the period from 1982 to 1992.

4. Which of the following, if true, would most clearly serve to weaken the author’s claim about what constitutes a reasonable yardstick for measuring patent quality?

(A) It is more difficult to have an article accepted for publication in the technical literature of the semiconductor industry than it is in the technical literature of most other industries.
(B) Many of the highest-quality semiconductor patents are cited numerous times in the technical literature.
(C) It is difficult for someone not familiar with the technical literature to recognize what constitutes an innovative semiconductor patent.
(D) There were more citations made per semiconductor patent in the technical literature in the 1970’s than in the 1980’s.
(E) Low-quality patents tend to be discussed in the technical literature as frequently as high-quality patents.

5. The passage suggests that the use of patents as bargaining chips to ward off infringement suits

(A) was rarely successful during the 1980s
(B) became increasingly infrequent in the 1980s
(C) does not fulfill the intended purpose of the patent-granting system
(D) is a consequence of the decline in patent quality
(E) is discussed increasingly in the semiconductor industry's technical literature

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