Abstract
This study investigated the effect of patent value on the renewal (survival) of patents. The private value of patents can be one of the main pillars sustaining a firm’s value, and the estimation of the value may contribute to the strategic management of firms. The current study aimed to confirm the recent research findings with survival analysis, focusing on the more homogeneous patent data samples. In this study, a dataset is constructed from a cohort of 6646 patents from the 1996 and 1997 application years, using patent data from the European Patent Office (EPO). We found that the family size and non-patent backward citations exhibited profound impacts on patent survival. This result is in line with numerous studies, indicating the positive impact of science linkages in the biotechnology and pharmaceutical fields. It was also found that the effect of the ex-post indicator is not as strong as the ex-ante indicators, like traditional family size and backward citations. In short, the family size matters most for the survival of patents, according to the current research.
Highlights
The value of a patent to its owners depends on its legal protection of the power of invention, and it is almost analogous to the maximum legal cost—how much they will pay for claiming ownership
Recalling the research hypothesis on the importance of an ex-post indicator, we found that family size is the most important indicator for the survival of the current 1996–1997 cohorts
The research question was answered that the ex-post indicator is not as influential as the ex-ante family size indicator for patent survival
Summary
The value of a patent to its owners depends on its legal protection of the power of invention, and it is almost analogous to the maximum legal cost—how much they will pay for claiming ownership. The formal protection is limited for a designated period (for up to twenty years after filing the application forms), and the span can be from as short as a few years to as long as twenty years, the maximum, depending on the owners’ decision to renew the patent. Some researchers have suggested that the changing value of a patent for its lifetime period is due to the obsolescence of the technology, the decreasing protection time remaining, or “invent around”-type competing patents [7]. A recent study on patent renewal fees
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