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The role of patents and licenses in securing external finance for innovation

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  • Harhoff, Dietmar

    ()
    (Ludwig-Maximilians-Universität Munich)

Abstract

Financing constraints have been discussed as a major obstacle to innovation. Small and medium-sized enterprises and start-ups are particularly concerned by such impediments. Venture capital has emerged as a partial solution in some countries, but is only available for start-up firms with major growth potential. Recently, new intermediaries have attempted to provide external finance to innovative firms based on the firms’ patent portfolios. Patents have been used as collateral or as assets assembled in patent funds seeking to commercialize the patent rights. Patent auctions are indicative of a nascent market for patented technology. This paper presents an overview on the role of patents and licenses, both in the classical sense and as instruments for financing innovation. It also discusses implications of these developments for public policy and the design of patent systems.

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Bibliographic Info

Paper provided by European Investment Bank, Economics Department in its series EIB Papers with number 11/2009.

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Length: 23 pages
Date of creation: 23 Dec 2009
Date of revision:
Handle: RePEc:ris:eibpap:2009_011

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Keywords: entrepreneurship; intellectual property; equity; innovation; finance; venture capital; R&D; financing constraints; funding gaps;

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References

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Cited by:
  1. Colombo, Massimo G. & Croce, Annalisa & Guerini, Massimiliano, 2013. "The effect of public subsidies on firms’ investment–cash flow sensitivity: Transient or persistent?," Research Policy, Elsevier, Elsevier, vol. 42(9), pages 1605-1623.
  2. Gaétan de Rassenfosse, 2010. "How SMEs Exploit Their Intellectual Property Assets: Evidence from Survey Data," Melbourne Institute Working Paper Series, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne wp2010n20, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  3. Dang, Jianwei & Motohashi, Kazuyuki, 2012. "Patent value and liquidity: evidence from patent-collateralized loans in China," MPRA Paper 49547, University Library of Munich, Germany.

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