Citation Frequency and the Value of Patented Inventions

Harhoff, Dietmar; Narin, Francis; Scherer, F. M.; Vopel, Katrin

doi:10.1162/003465399558265

Cited by 1,202 publications

(708 citation statements)

References 4 publications

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“…In combination with other evidence on new pharmaceutical compounds and the outcomes of high-technology venture investments (Scherer 1997), we now possess a clear picture of the range of profit or quasi-rent distribution shapes resulting from investments in innovation. Those distributions are the result of stochastic processes played out as the menu of technological possibilities is tapped, market prospects are tested, and competitive forces impinge.…”

Section: Discussionmentioning

confidence: 97%

Exploring the Tail of Patented Invention Value Distributions

Harhoff¹,

Scherer

Vopel

2003

Economics, Law and Intellectual Property

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*Patent renewal studies reveal a highly rightward-skewed distribution of patent values. Our approach elicits valuations approximating those of the patented invention. This paper focuses on the full-term patents of the application year 1977 held by West German and U.S. residents. The tail of skewed distributions values account for a large fraction of the cumulative value over all observations. Several tests were conducted to pin down more precisely the nature of the high-value tail distribution. Three highly skew alternatives were evaluated by graphical and maximum likelihood techniques: the two-parameter log normal, the one-parameter Pareto-Levy, and the three-parameter Singh-Maddala distribution. A two-parameter log normal distribution appears to provide the best fit to our patented invention value data. ZUSAMMENFASSUNG Non-technical SummaryAssessing value of patent protection has long been a central issue in the economic literature studying the incentives for innovation in market economies. A number of authors have exploited a particular feature of many (though not all) national patent systems: the renewal fee structure. In many countries, patent holders need to pay annual renewal fees in order to keep patent protection in force. The fees are usually increasing over time in order to weed out less important patents. Using information on the timing of non-renewal, some studies have been able to infer the value of patent protection.However, these studies cannot use observable information on value differences among those patents that were renewed for the maximum duration of patent protection. But these are presumably the most important patented inventions. Since the valuation distributions are extremely skew, actually observed information in most renewal studies is only available on a small share of the total value of the overall national patent portfolio.We circumvent this problem by using a novel and more direct approach to the measurement of patent valuation. The paper focuses on the full-term patents of the application year 1977 held by West German and U.S. residents. For the German patents, a two-stage methodology was pursued. A preliminary telephone and telefax screening elicited patent value estimates and identified the most valuable patents, about which on-site interviews were then sought to develop more detailed historical information. For the U.S. patents, only an extended first stage was executed.Previous studies have found the distribution of patented invention values to be highly skew. We confirm this result, using actual information on the most valuable patents in the 1977 cohort. Several tests were conducted to pin down more precisely the nature of the high-value tail distribution. Three highly skew alternatives were evaluated by graphical and maximum likelihood techniques: the two-parameter log normal, the one-parameter ParetoLevy, and the three-parameter Singh-Maddala distribution. A two-parameter log normal distribution appears to provide the best fit to our patented invention value data.

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Section: Discussionmentioning

confidence: 97%

Exploring the Tail of Patented Invention Value Distributions

Harhoff¹,

Scherer

Vopel

2003

Economics, Law and Intellectual Property

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“…The citations from other patents to a patent, the so-called forward citations, on the other hand are an indication for the importance of the patent. Patents with higher numbers of forward citations are considered to also have a higher economic value for the firm possessing the patent (Trajtenberg, 1990a;Harhoff et al, 1999). Forward citations are also considered to be a good indication for the technological importance of an invention (Dahlin and Behrens, 2005).…”

Section: Datamentioning

confidence: 99%

“…In the research of Harhoff et al (1999) it was shown that firms are willing to pay the renewal fees only for important inventions, which leads firms to have only the maximum patent protection for important inventions, leaving less important inventions with a shorter patent protection period. This behavior leads to more citations for important inventions since they have a longer patent-life, but on the other hand they also find that, of the patents with a fullterm patent protection period, the citation frequency rises with the economic value of the invention, as reported by the firm.…”

Section: Datamentioning

confidence: 99%

The technological origins of radical inventions

2010

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a b s t r a c tThis paper aims to trace down the origins of radical inventions. In spite of many theoretical discussions on the effect of radical inventions, the specific nature of radical inventions has received much less attention in the theoretical and empirical literature. We try to fill that void by an empirical investigation into the specific origins of radical inventions. We explore this issue by a close examination of 157 individual patents, which are selected from a pool of more than 300,000 patents. In contrast to the conventional wisdom that radical inventions are based less on existing knowledge, we find that they are to a higher degree based on existing knowledge than non-radical inventions. A further result that follows from our analysis is that radical inventions are induced by the recombination over more knowledge domains. The combination of knowledge from domains that might usually not be connected seems to deliver more radical inventions.

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“…One approach to mitigate this limitation is given by a careful analysis of patent quality, using the indicators proposed in the literature initiated by Trajtenberg (1989; and fully developed by Jaffe, Trajtenberg and Henderson (1993). 4 There is sufficient evidence in the literature that the economic value of patents is associated with the number and quality of citations received in other patents (Hall, Jaffe and Trajtenberg 2005;Harhoff et al 1999;Trajtenberg 2002). Harhoff et al (2003) and Lanjouw and Schankerman (2001) have suggested a different metrics, i.e.…”

Section: Literature Background On Science-technology Interactionsmentioning

confidence: 99%

Institutional complementarity and inventive performance in nano science and technology

2007

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Academics and policy makers are questioning about the relation between science and technology in the emerging field of nano science and technology (NST) and the effectiveness of different institutional regimes. We analyze the performance of inventors in the NST using multiple indicators. We clustered patents in three groups according to the scientific curricula of the inventors. The first two groups are composed by patents whose inventors all are authors of at least one scientific publication in the NST or none of them have obtained a scientific publication in that field respectively. Thirdly, we isolated those patents that have at least one inventor, who is also author of at least one scientific publication in the NST. The underlining presumption of this classification is that of a proxy of different institutional complementarities of the inventive collective action in NST.

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Citation Frequency and the Value of Patented Inventions

Cited by 1,202 publications

References 4 publications

Exploring the Tail of Patented Invention Value Distributions

Exploring the Tail of Patented Invention Value Distributions

The technological origins of radical inventions

Institutional complementarity and inventive performance in nano science and technology

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