Measuring Patent Value Indicators with Patent Renewal Information

Joo Young Og,Rafal Paprocki,Krzysztof Pawelec,Euiseob Jeong,Byung-Keun Kim

doi:10.3390/joitmc6010016

Abstract

This paper attempts to fill a research gap of literature by constructing the dynamic model into which both ex ante and ex post patent value indicators are incorporated. A patent renewal model is tested using a large set of Pharmaceutical patents granted by the European Patent Office between 1996 and 2009. We test five ex ante indicators and single ex post indicator including family size, patent backward citations, backward references to non-patent literature, number of claims, number of inventors, renewal fee, patent age, application year, and the ex post indicator forward citations. Empirical findings show that three citation related indicators, family size, and the number of claims are positively associated with patent values, while the number of inventors, renewal fee, patent age, and application year are negatively correlated. In addition, forward citations seem to have persistent learning effects on patent values.

Highlights

The private value of a patent depends on the specific context in which valuation is made.A valuation must be made “within the context of time, potential owners, and potential uses” [1] (p. 141).In general, many important determinants of patent value such as commercialization strategies are hidden or unknown as of the valuation date and observable patent value indicators such as counts of citations, claims, while words of the patent paper don’t provide enough information for appraisers to precisely estimate the value of a patent.The literature on private values of patents or innovations point to a highly skewed nature of the distribution of patent values
2, relied on accumulation citations as the ex post indicator, while the second results are shown in Table 2, relied on accumulation citations as the ex post indicator, while the second classof ofmodels modelsshown shownin inTable
Empirical results show that three citation related indicators, family size, and the number of claims are positively associated with patent values, while the number of inventors is negatively correlated

Summary

Introduction

The private value of a patent depends on the specific context in which valuation is made. The literature on private values of patents or innovations point to a highly skewed nature of the distribution of patent values. Scotchmer [2] summarized findings from different sources as stylized facts about the distribution of patent values: the values of patents are highly dispersed and the distribution of values is highly skewed, with most of values provided by the top tier (around 10%). Academic researches on the distribution of patent values are not considered to provide practical guidance for patent value appraisals, information about the distribution of values can be effectively exploited to test and compare the validities of vast lists of existent or potential patent value indicators

Results

Discussion

Conclusion