How to Count Patents and Value Intellectual Property: Uses of Patent Renewal and Application Data

Patent counts are very imperfect measures of innovative output. This paper discusses how additional data-the number of years a patent is renewed and the number of countries in which protection for the same invention is sought - can be used to improve on counts in studies which require a measure of the extent of innovation. A simple renewal based weighting scheme is proposed which may remove half of the noise in patent counts as a measure of innovative output. The paper also illustrates how these data can be used to estimate the value of the proprietary rights created by the patent laws. The parameters estimated in this analysis can be used to answer a series of questions related to the value of patents. We illustrate with estimates of how the value of patent protection would vary under alternative legal rules and renewal fees, and with estimates of the international flows of returns from the patent system. Recent progress in the development of databases has increased the potential for this type of analysis.

[1]  Samuel Kortum,et al.  Assigning Patents to Industries: Tests of the Yale Technology Concordance , 1997 .

[2]  R. Evenson,et al.  International Invention: Implications for Technology Market Analysis , 1984 .

[3]  Alfred Kleinknecht,et al.  Determinants of innovation : the message from new indicators , 1996 .

[4]  Alfred Kleinknecht,et al.  Determinants of Innovation , 1996 .

[5]  Ariel Pakes,et al.  Patent Renewal Data , 1989 .

[6]  Mark Schankerman,et al.  How Valuable is Patent Protection?: Estimates by Technology Field , 1998 .

[7]  Josh Lerner,et al.  Patenting in the Shadow of Competitors , 1995, The Journal of Law and Economics.

[8]  A. Jaffe.  Technological Opportunity and Spillovers of R&D: Evidence from Firms&Apos; Patents, Profits and Market Value , 1986 .

[9]  Barkev S. Sanders,et al.  Some Difficulties in Measuring Inventive Activity , 1962 .

[10]  William D. Nordhaus,et al.  Invention, Growth, and Welfare: A Theoretical Treatment of Technological Change by William D. Nordhaus (review) , 1969, Technology and Culture.

[11]  Z. Griliches.  Patent Statistics as Economic Indicators: a Survey , 1990 .

[12]  Zvi Griliches,et al.  Patents and R&D at the firm level: A first report , 1980 .

[13]  Zvi Griliches,et al.  Issues in Assessing the Contribution of Research and Development to Productivity Growth , 1979 .

[14]  C. I. Jones,et al.  Too Much of a Good Thing? The Economics of Investment in R&D , 1999 .

[15]  Ariel Pakes,et al.  Estimates of the Value of Patent Rights in European Countries During Thepost-1950 Period , 1985 .

[16]  Francesca Cornelli,et al.  Optimal Patent Renewals , 1996 .

[17]  Jean O. Lanjouw,et al.  Patent Protection in the Shadow of Infringement: Simulation Estimations of Patent Value , 1998 .

[18]  Mark A. Schankerman,et al.  Stylised Fact of Patent Litigation: Value, Scope and Ownership , 1997 .

[19]  Dietmar Harhoff,et al.  Exploring the Tail of Patented Invention Value Distributions , 1997 .

[20]  Richard J. Sullivan.  Estimates of the Value of Patent Rights in Great Britain and Ireland, 1852-1876 , 1994 .

[21]  Simon Kuznets,et al.  Inventive Activity: Problems of Definition and Measurement , 1962 .

[22]  A. Pakes,et al.  The Rate of Obsolescence of Knowledge, Research Gestation Lags, and the Private Rate of Return to Research Resources , 1979 .

[23]  M. Trajtenberg.  A Penny for Your Quotes : Patent Citations and the Value of Innovations , 1990 .

[24]  Saul Lach,et al.  Patents and productivity growth at the industry level: A first look , 1995 .

[25]  Samuel Kortum,et al.  Research, Patenting, and Technological Change , 1997 .