Exploring the effect of structural patent indicators in forward patent citation networks on patent price from firm market value

Abstract

This paper introduces structural patent indicators in the forward patent citation networks (FPCNs). Using the estimates of their relationship with firm market value, it explores the effect of the structural patent indicators on patent price. When applied to US smartphone industry and US drug and biotechnology industry, the common finding is that a firm's registered patent gets higher price if influenced faster by the previously registered patents of the same firm through self-citations. The empirical results imply that merely counting forward citations, shown related to patent price by the previous works, is insufficient; the structural properties in FPCNs are essential for the more accurate estimation of patent price. They also show that the relationships between structural patent indicators in the FPCNs and patent price are different between industries. It urges the necessity of selecting structural patent indicators, well fitted to each industry, for the better patent valuation using forward citations.