Patent Renewals as Options: Improving the Mechanism for Weeding Out Lousy Patents
AbstractThis paper examines how patent renewal fees may be restructured to discourage low-value patents with the goal of reducing the burden on patent offices without unduly impairing innovation incentives. We depart from Pakes’ (1986, Econometrica, 54, 755–784) real-option model by moving to an approach involving binomial trees, widely used in valuing financial options. The new approach has the advantage of allowing the dynamics of the patent rent to follow a wide range of stochastic processes. The model is estimated using French data from 1970 to 2002. Policy simulations cast some doubt on the relevance of the current schedule of renewal fees. An alternative fee schedule is suggested. Copyright Springer 2006
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Springer in its journal Review of Industrial Organization.
Volume (Year): 28 (2006)
Issue (Month): 1 (02)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100336
patent renewal; real-option model; C51; O31;
Find related papers by JEL classification:
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gans Joshua S & King Stephen P & Lampe Ryan, 2004. "Patent Renewal Fees and Self-Funding Patent Offices," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 4(1), pages 1-15, July.
- Bessen, James, 2008.
"The value of U.S. patents by owner and patent characteristics,"
Elsevier, vol. 37(5), pages 932-945, June.
- James Bessen, 2006. "The Value of U.S. Patents by Owner and Patent Characteristics," Working Papers 0603, Research on Innovation.
- Bessen, James, 2009. "Estimates of patent rents from firm market value," Research Policy, Elsevier, vol. 38(10), pages 1604-1616, December.
- Roy Cerqueti & Marco Ventura, 2009. "A Discrete Model for Patent Valuation," ISAE Working Papers 120, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
- Bruno van Pottelsberghe & JÃ©rÃ´me Danguy, 2009.
"Cost Benefit Analysis of the Community Patent,"
- Jérôme Danguy & Bruno Van Pottelsberghe, 2011. "Cost-Benefit Analysis of the Community Patent," ULB Institutional Repository 2013/101071, ULB -- Universite Libre de Bruxelles.
- Danguy, Jérôme & van Pottelsberghe de la Potterie, Bruno, 2010. "Cost-Benefit Analysis of the Community Patent," CEPR Discussion Papers 7631, C.E.P.R. Discussion Papers.
- Chi Leung & Yue Kwok, 2011. "Real options game analysis of sleeping patents," Decisions in Economics and Finance, Springer, vol. 34(1), pages 41-65, May.
- Christopher Snyder, 2006. "Introduction to the 2005 International Industrial Organization Conference Special Issue," Review of Industrial Organization, Springer, vol. 28(1), pages 1-2, 02.
- Marc Baudry & Béatrice Dumont, 2009. "A Bayesian Real Option Approach to Patents and Optimal Renewal Fees," Working Papers hal-00419330, HAL.
- Gupeng, Zhang & Xiangdong, Chen, 2012. "The value of invention patents in China: Country origin and technology field differences," China Economic Review, Elsevier, vol. 23(2), pages 357-370.
- Huang, Can, 2012.
"Estimates of the value of patent rights in China,"
MERIT Working Papers
004, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
- Giummo, Jesse, 2010. "German employee inventors' compensation records: A window into the returns to patented inventions," Research Policy, Elsevier, vol. 39(7), pages 969-984, September.
- Marc Baudry & Béatrice Dumont, 2012. "Valuing patents using renewal data : an inquiry into the feasability of an automated patent scoring method," EconomiX Working Papers 2012-31, University of Paris West - Nanterre la Défense, EconomiX.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.