Why do some patents get licensed while others do not?

Abstract

The global licensing market was estimated to be worth $200 billion in 2011 (Alvarez and L opez, 2015) and licensing royalty payments grew at a rate of almost 10% between 1990 and 2003 (Athreye and Cantwell, 2007). At the same time, however, numerous patents remain unlicensed (Gambardella et al., 2007) and many firms have difficulty finding licensing partners (Zuniga and Guellec, 2008; Kani and Motohashi, 2012). Reconciliation of this puzzle is central to the call to better understand why firms choose each other for a licensing agreement (Kim and Vonortas, 2006a; Arora and Gambardella, 2010a). To address this research opportunity, we examine the impact of eight licensor characteristics and four patent characteristics on the ability of a patent owner to be identified and selected by a buyer. In varying and overlapping ways, the firm-level determinants reflect the search and learning capabilities of the licensor, as well as its visibility and attractiveness. The patent-level determinants control for differences in patent quality. Three of the firm-level determinants (licensor prestige, licensor technological depth, and licensor technology breadth) are new to the licensing research literature and allow us to examine how the licensor characteristics act as signals that help licensees to identify , evaluate, and choose a licensor and its patent over licensors with similar patents. While the other determinants have been examined in previous studies, we confirm or refute previous findings using a more sophisticated empirical method of identifying alternate patents.

Topic Modeling in Management Research: Rendering New Theory from Textual Data

“…Their study has implications for teasing out longstanding debates in management around contrasting theories of creative processes surrounding the sources of innovative breakthroughs. In a related study, Ruckman and McCarthy (2017) used topic modeling to analyze patents in an attempt to explain why some patents are licensed over others. Their goal was to address conflicting findings in prior research: some scholars have advocated a "status model" (Podolny, 1993), whereas others have supported organizational learning explanations based on optimizing knowledge transfer in licensing contracts (Arora, 1995).…”

Evaluating Determinant Priority of License Fee in Biotech Industry

“…Technical licensing involves the transfer of intellectual property (IP) between the IP owner (licensor) and buyer (licensee). The licensor aims to derive its value in the form of licensing revenue and is willing to license the technology due to a lack of intellectual, financial, or physical resources for commercialization [23].…”

“…The study of Sung et al added the quality of technology to the technology factor as the determinant affecting the value of the patent [40] and several studies have followed [8,23,28,[42][43][44][45]. Sakakibara added the similarity between licensed patents and the core technology of the technology provider (i.e., the ratio of the number of a licensor's patents in the same International Patent Classification (IPC) as the licensed patent to the total number of patents applied by a technology consumer), licensor patent stock (i.e., the number of patent applications by a licensor), and licensee patent stock as the determinants that affected the amount of licensing paid for technology transfer [26] and several studies have followed [19,29,32,35,39,46].…”

“…Svačina added the R&D costs of the licensor and licensee as factors affecting the value of intangibles [45] and several studies have followed [17,23,31,32,43,47,48]. Sakakibara added the sales per capital of the licensor and licensee as a size indicator among the determinants of the price of patent licensing [26] and several studies have followed [23,34,38].…”

“…Several studies on market factors conducted since Paik have suggested that market factors, such as the stage of development, experience of technology transfer, and marketability, are some of the major determinants affecting technology transfer in his AHP analysis [3,4,8,23,[28][29][30][31]34,38,40,47,[49][50][51][52]; Paik believed that the application of transferred technology could pioneer new markets for the licensee, or enhance the competitive edge of the licensee [30]. The study of Joo et al suggested that the proportion of the patent protected technologies applied to the product (i.e., product sales technology weight) was one of the crucial factors of the IP valuation model for IP mortgage lending [30].…”