Patent Value Research Articles

Patent value and the performance of high-tech enterprises: a configurational analysis of start-ups and mature firms by using fsQCA

ABSTRACT The study of patent value plays a significant role in technology planning and business strategy. However, the relations between patent value indicators and the performance of high-tech enterprises have not been fully explored in the literature, especially from the perspective of configuration thinking. To fill this gap, this study examines how various patent value indicators combine to affect the performance of high-tech enterprises. After considering the strategic, technological and protective dimensions of patenting, we conduct a comparative configurational analysis of high-tech start-ups and mature firms through a fuzzy-set qualitative comparative analysis (fsQCA) method. Result shows different pathways of high-tech start-ups and mature firms to obtain competitive advantage through patents, in which strategy-oriented patents lead to start-ups’ growth, whereas protection-oriented patents contribute to mature firms’ high performance. Further, we find five solutions of patent values through which high-tech start-ups can achieve high performance, yet only one for high-tech mature firms. This finding indicates that start-ups have more choices to promote firm performance by enhancing patent value. On the basis of this approach, we shed light on high-tech enterprises’ patent strategy formulating and technology planning.

Market-based patent value of green transformation technologies

This paper employs the green technology classification published by the Japan Patent Office to estimate the values of green and non-green innovations. By computing patent values based on stock price reactions to the announcement of patent issuance, this paper finds that, on average, green patents have higher values than non-green patents in the pooled sample. However, results from the matched sample indicate the presence of selection biases.

The role of sustainability and SDGs in patent valuation

There is an urgent demand for developing and adopting environmentally sound technologies (ESTs). This article studies the existing methodologies for incorporating sustainability considerations into the complex field of patent valuation, focusing on start-ups and growth companies. Due to the agility and innovative potential, growth companies play a pivotal role in advancing ESTs, and patents serve as crucial instruments in facilitating technology transfer, provided that effective patent valuation processes are in place. The article shows the diversity of guidelines and standards available for patent valuation, highlighting that they provide valuable non-binding frameworks. However, the study reveals that most existing patent valuation standards do not explicitly address sustainability concerns, except for the World Intellectual Capital Initiative (WICI), which is actively engaged in the sustainability discourse. Overall, the challenge is how companies observe sustainability in the valuation process. The United Nations Sustainable Development Goals (SDGs) emerge as a global framework that can guide patent valuation practices. The article highlights the need for patent valuation guidelines to embrace sustainability as an integral component, ensuring that sustainability and ESTs are integrated throughout every phase of the patent life cycle. Acknowledging that start-ups and growing companies often face financial constraints and need guidance in their valuation practices is crucial.

Estimating the value of expired and active patents: A renewal model approach

ABSTRACT This study proposes an updated renewal model to estimate active patent value and technical depreciation in five major Indian technology fields. According to a study of 27,000 patents issued by the Indian Patent Office between 1998 and 2018, Indian patents have a lower value than foreign patents. This suggests that India's patenting and R&D qualities differ from those of more advanced countries. Technology-specific factors are important because technology fields depreciate at different rates. The top 5% of patents accounted for most international and domestic patent values. A genetic algorithm is used to optimise the renewal model accuracy. This study has significant implications for Indian policymakers, patent holders, international investors, and technology market participants. This model allows startups and new businesses who want to value their IP at the very early stage to negotiate with their counterpart when licensing or selling the patents.

Do scarce resource inputs promote or reduce patent values and innovation? A game theory approach

ABSTRACT Both patent price and innovation play crucial roles in the patent market and this article studies patent values under capacity or resource constraints using a game theory approach. First, patent industrialization advances consumer surplus in all situations. Second, under a monopoly, there is an inverse U-shaped relationship between the patent value and the total amount of a resource. Third, under an oligopoly with nonbinding capacity constraints, the patent value decreases as the total amount of the resource increases. Finally, the overall relationship between the patent value and the total amount of the resource under an oligopoly also has an inverse U-shape.

In the mood for creativity: Sunshine-induced mood, inventor performance, and firm value

We investigate how firm value may be related to emotional and mental states of innovative workers via the innovation channel. By analyzing a comprehensive inventor-level dataset, we discover that the economic value inventors produce for their firms through their patenting activity is positively associated with their sunshine-induced mood. This augmentation in patent value is not due to a surge in the quantity of patents, but rather to the heightened significance and influence of the created inventions. These inventor-level observations aggregate to the firm level. The observed sunshine-enhanced effect is of a magnitude comparable to other primary behavioral drivers of innovation outcomes, such as CEO overconfidence and CEO thrill-seeking tendencies. Our research underscores the significance of the emotional and psychological states of innovative personnel that has implications for managers and shaerholders.

Patent Remedies and Patent Valuation: Evidence from China

Patent Remedies and Patent Valuation: Evidence from China

Stock liquidity and the signaling value of patents: Evidence from china's national equities exchange and quotations market

Young and technology-oriented firms suffer from asymmetric information in seeking access to finance. An increase in stock liquidity can improve a firm's stock price informativeness and mitigate such information problems. We expect that firms will patent less when they face an increase in liquidity if patenting is used as a costly signal mechanism to demonstrate firm quality. By examining an exogenous policy shock that dramatically improves the stock liquidity of treated firms in China's National Equities Exchange and Quotations (NEEQ) market, we document evidence that treated firms patent less after the shock. Our findings reveal the importance of liquidity in reducing the deadweight costs caused by asymmetric information and the signaling value of patenting, and urge caution regarding the sole use of patent applications to measure innovation performance in entrepreneurial firms.

A new hybrid machine learning model for predicting the renewal life of patents.

In almost every country, patents need to be renewed multiple times after they are granted. A patentee assesses the value of the patent and then pays a renewal fee to keep it active for another stipulated period. The factors that characterize the value of a patent is subjective. This paper aims to address the research gap of building an accurate model for predicting the renewal life (often considered as a substitute for the patent value) of Indian patents, and identification of significant factors that influence the renewal life. This study uses an extensive data set collected from the Indian Patent Office for all granted patents filed between 1995 and 2005. The popular statistical and machine learning algorithms do not result in accurate predictive models, because the patent renewal life distribution (at least for the Indian patents) shows unusual spikes at the two extreme values, which makes the modeling task more challenging. We propose a new two-stage hybrid model by combining an efficient multi-class classifier and a binomial regression model for predicting the complex renewal data distribution. We conducted a comparative analysis of the proposed model with several state-of-the-art machine learning and statistical models. The results show that the proposed hybrid model gives 90% accuracy as compared to the best competitor which gives only 40% accuracy.

Employee health and corporate innovation: Evidence from medical cannabis legalisation

AbstractWe study the effects of employee health on corporate innovation by exploiting staggered medical cannabis legalisation across states from 1995 to 2020. Medical cannabis legalisation increases medical access, thereby significantly influences employee health. Using a difference‐in‐differences empirical design, we find that firms became more innovative after their states legalised medical cannabis use. In particular, we show that firms produced more patents, generated more patents with significant impacts, and attained higher patent value following the passage of bills to legalise medical cannabis. We identify a possible mechanism through which employee health spurs innovation: lower worker turnover. Lower worker turnover encourages firm‐specific human capital investments and facilitates inter‐generational knowledge transfer. Taken together, our findings support the hypotheses that medical cannabis legalisation improves employee health, overall well‐being and their innovative capacities.

Green innovation and firms’ financial and environmental performance: The roles of pollution prevention versus control

This study examines the effects of firms' green innovation on their future financial and environmental performance. If pollution is primarily a manifestation of wasted resources, then investments in pollution prevention technologies can both reduce the environmental impact of production and improve financial performance. In contrast, investments in pollution control technologies likely reduce the environmental impact of production without improving financial performance. Using green patents to capture firms' investments in these two types of technologies, we find that the value of a firm's pollution prevention patents is positively associated with its future financial and environmental performance, and that the positive impact on future financial performance is achieved through improvements in sales growth and cost efficiency. In contrast, the value of a firm's pollution control patents is not associated with its future financial or environmental performance. Overall, these findings shed light on the future implications of green innovation.

CTO Network Centrality and Corporate Innovation

Social network centrality of chief technology officers (CTOs) affects corporate innovation. Firms with CTOs who are well-connected within the network of all business professionals invest more in research and development (R&D), receive more patents, attract more patent citations, and create more patent value. Besides the effect of the general business network centrality, higher professional network centrality of CTOs (within the network of all other CTOs) also fosters corporate innovation. In addition, firms innovate more and better if CTOs are hired by the incumbent CEOs. Ultimately, R&D investment of companies with high-centrality CTOs enhances firm value.

Estimating patent value in the United States and Japan

Patents contribute to economic development; therefore, estimations of patent value are significant in measuring their impact on the economy. With this in mind, this article discusses estimations of patent value with the renewal model developed by several economists. Targeted patents are those issued in the United States and Japan from 1990 to 2010. In addition, the study examines patent values for several technology fields and considers which technology field should be the focus for the United States and Japan. Moreover, this article compares estimations based on the renewal model versus those based on other data such as sales, trade prices, or trials and analyzes how close this model's estimations are to the real values. This article's results demonstrate that the renewal model is useful for evaluating patents overall and analyzing technological trends from a patent perspective.

Can university-enterprise cooperative innovation promote total factor productivity? – Evidence from Chinese-listed firms

ABSTRACT Based on the patent data of university-enterprise cooperative innovation (UECI) from CNIPA and the financial data of Chinese listed companies from 2010 to 2022, we find that UECI can promote the total factor productivity (TFP) of enterprises and that the average application value of each UECI patent is 29.07 million yuan, and confirm the robustness of our conclusions using the instrumental variables method, system GMM and the Heckman two-step method. The results of the mediation analysis show that UECI promotes the TFP of enterprises through three channels: alleviating financing constraints, attracting more knowledge workers and increasing the innovation efficiency of the enterprise. UECI can build alumni linkages between universities and enterprises, expand financing channels and attract more university students to join the company after cooperation, thus increasing their workers’ overall education level. UECI can also enable the firm to emulate academics how to innovate more effectively. Heterogeneity analysis shows that UECI can lead to a higher TFP improvement for enterprises in the leasing and business service industry and scientific research and technology service industry, which are 97 and 3 times higher than the baseline regression, respectively.

Leveraging intellectual property: The value of harmonized enforcement regimes

This paper examines the role of intellectual property (IP) law as a determinant for external debt financing of innovative firms. For identification, we exploit exogenous variation in patent right enforcement arising from the 2004 EU Enforcement Directive. This major policy reform strengthened IP rights and, thus, raised patent owners' asset position. We find that patenting firms significantly increase their use of debt and benefit from lower interest rates in response to the amendment, especially if they own valuable patent portfolios. These effects are most pronounced for relatively small and financially constrained firms, emphasizing the importance of the legal framework in fostering debt financing activities of innovation-oriented firms.

Standing on the shoulders of science

AbstractResearch SummaryToday's innovations rely on scientific discoveries of the past, yet only some corporate R&D builds directly on scientific output. In this article, we analyze U.S. patents to investigate how firms generate value by building on prior art “closer” to science. We show that patent value is decreasing in distance‐to‐science. Overall, we find a science premium within firms ranging from 5.0 to 18.3%. If we allow for firm sorting into different modes of R&D based on their relative advantage, that is, when we do not control for firm fixed effects, we find an even larger science premium: patents building directly on scientific publications are 4.0–42.3% more valuable than patents in the same technology that are not directly based on science.Managerial SummaryBuilding on scientific research allows firms to capture significantly more value from their inventions. By analyzing U.S. patents and their linkages to scientific publications, our paper describes the relationship between invention “proximity” to the scientific literature and public firm valuations—as measured in abnormal stock market returns. Our findings indicate that patents building on science are 5.0–18.3% more valuable. If we account for variations in R&D strategies among firms, the premium becomes even larger, ranging from 4.0 to 42.3%. Further, the results show that the value‐enhancing benefits of integrating scientific insights into R&D are greater for firms with more experience building on science. Together, the results underscore the competitive advantages of using science as a foundation for corporate innovation.

Market-first or technology-first? Exploring unicorns’ pathways to extreme valuations

In this study, we explore: 1) whether unicorns predominantly emerge from a focus on developing novel technologies, understanding market needs, or a balanced integration of both; 2) how these three strategic orientations correlate with unicorns’ growth rates; and 3) how various unicorn features, including early access to funding, moderate answers to the first two questions. To address these questions, we hand-collect data on 137 unicorns and examine the timing of their first patent and trademark filings, initial institutional funding, and company characteristics. Our findings indicate that all three strategic orientations – technology-first, market-first, and balanced orientation – can lead to extreme valuations. Specifically, the market-first approach emerges as the most common, with the balanced orientation most frequently associated with high growth, and the technology-first approach linked with the highest growth. Additionally, unicorns receiving seed funding before filing their first patents or trademarks tend to exhibit significantly higher median growth rates compared to those filing for intellectual property rights before securing seed funding. This study contributes to the nascent literature on unicorns, and established literature streams on strategic orientation and the value of patents, trademarks, and initial funding as signals of unobserved quality for startups.

The Effect of Research and Development on Economic Growth in Ethiopia: The Untapped Potential for Prosperity

This research measured the links between R&D and economic growth in Ethiopia employing multiple regression models. Citable journal articles, patents, technology exports, and research expenditures are the four predictor variables that are the focus of the study. GDP per capita growth is the outcome variable of the study, which serves as a proxy indicator for economic growth. The study used a panel dataset with data from a sample of 21 years between 2001 and 2021. The results show a significant link between growth of GDP per capita and citable journal articles, patents, and technology exports, demonstrating that these factors are essential for fostering economic growth. However, government expenditure on research and development has no discernible impact on economic growth, which accordingly, raises the possibility that raising research spending by itself may not be sufficient to boost the economy. These findings have tremendous policy implications because they emphasize the importance of concentrating on particular R&D initiatives that have a direct impact on economic growth. The study adds to the existing frontiers of knowledge inline with the connection between R&D and economic growth by demonstrating the value of citation-worthy journals, patents, and technology exports in fostering economic growth.

Optimization of Machine Learning-based Value Assessment Model in High Value Patent Cultivation in Universities

Abstract This paper constructs a patent value assessment model for colleges and universities from two perspectives of: value identification and price prediction. Firstly, 10 indicators are selected from 3 dimensions of technology, economy, and law. Then it combines the artificial way of entropy weight TOPSIS model and the machine learning way of gradient boosting tree to realize the identification of the value of university patents and the grading of the economic value of university patents. After analyzing, it can be seen that after pre-processing the data, 10 feature items related to patent value and useful for evaluation are screened out, and the highest weights of the number of homologous patents and the number of citations indicators are 0.1826 and 0.1274, respectively, which have the greatest influence on the economic value of high-value patents of colleges and universities. In the range of 4901-7071 of high-value patents, the assessment results fluctuated in the range of 1.3754-2.8395. The value of invention patents with a gradient range of 1-1400 as well as 6301-7071 fluctuates more dramatically. This paper proposes a patent value assessment model for universities that has a superior assessment and classification effect on high-value patents in universities.

Evaluation and cultivation method of high-tech value patents for mechanical products.

Evaluation of high value patents is essential for the enterprise's technical layout and innovative product design. The existing research on the patent value needs the support of a large number of professional statistical information and is difficult to directly reflect the technical value. Since technological innovation is the fundamental means to enhance the sustainable competitiveness of enterprises. Therefore, a high-tech value patent evaluation and cultivation method for engineering designers need to be proposed. Firstly, the patent samples based on design methodology are retrieved and the indicators for evaluating technical value are summarized and the rationality of the evaluation indicators is verifier through empirical study based on improved evidence theory. Secondly, based on principal component analysis and factor analysis, a high-tech value patent evaluation and cultivation method is proposed. Finally, the proposed method is applied to identify the high-tech value patents in the cutting machine industry, and structural improvement is made based on this patent to demonstrate the cultivation process of high-tech value patents. The proposed method provides a clear guiding direction for the cultivation of high novelty patents and enterprise innovative product design. The method can effectively assist the product R&D activities of engineering designers and enhance the sustainable competitiveness of enterprises from a technological perspective.