Commercialization, Renewal and Quality of Patents
AbstractOne of the major reasons why inventors are awarded patents by governments is they encourage R&D investments and commercialization of inventions. If the patent holder commercializes his invention, he has stronger incentives to retain the patent. The purpose here is to empirically analyze the relationship between commercialization and the renewal of patents. At the same time, I take into account defensive patent strategies (e.g. deterring competitors from utilizing the patent) and pointedly ask if there are any third factors (quality of the patent) that affect the commercialization and renewal decisions. Using a detailed database of Swedish patents, I utilize a survival model to estimate how commercialization influences the patent renewal decision. Basic results show commercialization and defensive strategies increase the probability a patent will be renewed, but also that quality influences commercialization and renewal decisions. When controlling for endogenous commercialization decision, there is still a strong positive relationship between commercialization and renewal of patents. Thus, given the quality of the patent, if the owner decides to commercialize the patent on the margin, this leads to longer survival of the patent. With regard to commercialization modes, there is some evidence licensed patents and patents commercialized in original and new firms – but not acquired patents – survive longer than non-commercialized patents. Looking more closely at the contracts of acquired and licensed patents, contracts with both variable and fixed fees – but not contracts with either variable or fixed fees – survive longer than non-commercialized patents. However, the analysis about modes and contract terms does not take into account the endogeneity problem.
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Bibliographic InfoPaper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 861.
Length: 40 pages
Date of creation: 31 Jan 2011
Date of revision:
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Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
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More information through EDIRC
Patents; Renewal; Commercialization; quality; Commercialization modes; Contract terms; Survival models;
Other versions of this item:
- Roger Svensson, 2012. "Commercialization, renewal, and quality of patents," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 21(2), pages 175-201, February.
- L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O34 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Intellectual Property Rights
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-19 (All new papers)
- NEP-CIS-2011-02-19 (Confederation of Independent States)
- NEP-COM-2011-02-19 (Industrial Competition)
- NEP-INO-2011-02-19 (Innovation)
- NEP-IPR-2011-02-19 (Intellectual Property Rights)
- NEP-TID-2011-02-19 (Technology & Industrial Dynamics)
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.:
- Bruno Van Pottelsberghe & Didier François, 2006.
"The cost factor in patent systems,"
Working Papers CEB
06-002.RS, ULB -- Universite Libre de Bruxelles.
- Francois, Didier & van Pottelsberghe, Bruno, 2006. "The Cost Factor in Patent Systems," CEPR Discussion Papers 5944, C.E.P.R. Discussion Papers.
- Bruno Van Pottelsberghe & Didier François, 2009. "The cost factor in patent systems," ULB Institutional Repository 2013/13422, ULB -- Universite Libre de Bruxelles.
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