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Royalties, evolving patent rights, and the value of innovation

In: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World

Author

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  • Edward F. Sherry

    (Institute of Management, Innovation and Organization, Haas School of Business, University of California, 1930554 Barrows Hall, Berkeley, CA 94720-1930, USA)

  • David J. Teece

    (Institute of Management, Innovation and Organization, Haas School of Business, University of California, 1930554 Barrows Hall, Berkeley, CA 94720-1930, USA)

Abstract

The value of an innovation to the innovator can change over time, especially in response to changes in the legal protection (such as patent rights) afforded the innovator. A proven-valid-and-infringed patent is a more valuable economic commodity than is an untested patent. The increase in value can be estimated using the success rate of patent lawsuits. Using a database of the outcomes of U.S. patent litigation, we find that plaintiffs win patent litigation some 45% of the time at the trial court level. This has implications both for patent damages awards and for the incentives to innovate. © 2003 Elsevier B. V. All rights reserved.

Suggested Citation

  • Edward F. Sherry & David J. Teece, 2008. "Royalties, evolving patent rights, and the value of innovation," World Scientific Book Chapters, in: The Transfer And Licensing Of Know-How And Intellectual Property Understanding the Multinational Enterprise in the Modern World, chapter 8, pages 151-163, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789812833181_0008
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    References listed on IDEAS

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    More about this item

    Keywords

    Technology Transfer; Royalties; Licensing; Cross Licensing; Intellectual Property; Multinational Enterprise; Research and Development; Foreign Investment;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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