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Exploring the Tail of Patented Invention Value Distributions

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  • Dietmar Harhoff
  • Frederic M. Scherer
  • Katrin Vopel

Abstract

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 - (Der Wert patentierter Erfindungen - Eine empirische Analyse der Verteilungseigenschaften) Wir analysieren die Verteilung der Erträge aus patentierten Erfindungen unter Nutzung von Daten, die in einer direkten Befragung der Patentinhaber ermittelt wurden. Das Papier konzentriert sich auf Patente deutscher Anmelder mit Anmeldungsjahr 1977, die die volle Laufzeit durch Zahlen der jährlichen Verlängerungsgebühren erreichten. Einige wenige besonders wertvolle Patente in unserem Datensatz stellen den Großteil des Gesamtwerts der Patente. Mehrere Tests werden durchgeführt um die Art der Verteilung der Erträge näher zu bestimmen. Dabei werden die Pareto-, die Singh-Maddala und die Lognormal-Verteilung verwendet. Die Lognormal-Verteilung scheint die von uns ermittelten Erträge aus patentierten Erfindungen am besten zu beschreiben.

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File URL: http://skylla.wz-berlin.de/pdf/1997/iv97-27.pdf
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Bibliographic Info

Paper provided by Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG) in its series CIG Working Papers with number FS IV 97-27.

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Length: 35 pages
Date of creation: Nov 1997
Date of revision:
Publication status: Published under the title "Exploring the Tail of Patented Invention Value Distributions" in: D. Harhoff, F. M. Scherer, K. Vopel (eds.): Patents: Economics, Policy and Measurement . Cheltenham, U.K. and Northampton, Mass.: Elgar, 2005, pp. 251-281.
Handle: RePEc:wzb:wzebiv:fsiv97-27

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Keywords: Patents; Skew Distribution;

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References

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  12. Dietmar Harhoff & Francis Narin & F. M. Scherer & Katrin Vopel, 1999. "Citation Frequency And The Value Of Patented Inventions," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 511-515, August.
  13. McDonald, James B, 1984. "Some Generalized Functions for the Size Distribution of Income," Econometrica, Econometric Society, vol. 52(3), pages 647-63, May.
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