Are the Blockchain-Based Patents Sustainable for Increasing Firm Value?

Abstract

Blockchain technology is changing conventional online transaction systems by eliminating payment gateway firms. The blockchain technology is highly attractive and has earned a lot of attention from investors and firms. To protect blockchain technology, firms acquire a patent of blockchain for enhancing the value of their blockchain technology. However, the sustainable value for a patent of blockchain has not been clearly explored. For this reason, our research attempted to explore the relationship between a patent of blockchain and firm value. We used a real options theory and built robust empirical tests based on United State Patents and Trademark Office (USPTO) data. We collected the patents of blockchains from 2014 to 2018 and matched financial data from the Compustat database. In total, we found 153 panel observations. Our results suggest that a firm’s patent of blockchain originality and t-1 lagged effects for a firm’s patent of blockchain generality are positively associated with firm value in general. In addition, the sustainable value for the patent of blockchain affects firms differently based on their industry. We found that the sustainable value for the patent of blockchain originality was positively and exclusively associated with the software industry, while the sustainable value for the patent of blockchain generality was positively and exclusively associated with the hardware industry.

Entangling knowledge search and innovation targets for inventing emerging technologies: the case for blockchain technology

“…We adopted their method and retrieved 15,100 Blockchain patents based on both keywords and IPC codes. Considering the growing trend of Blockchain patent applications (Bruens and Moehrle, 2018; Drobyazko et al ., 2019), we excluded data before 2014 due to the small total number, which is consistent with recent research (Frizzo-Barker et al ., 2020; Kim et al ., 2020). Because we need to know the patentee's previous patents to develop knowledge search measurements, patents with patentees that have no previous application records are excluded, trimming our dataset to 3,614.…”

“…Blockchain, a new technology for recording transactional information and tracking assets in a business network, is a typical case of emerging technology (Bruens and Moehrle, 2018; Frizzo-Barker et al ., 2020; Kim et al ., 2020). On one hand, Blockchain as a new technology has room for technical improvement, thereby attracting R&D innovations from many developers (Pillai and Biswas, 2019).…”