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Patent Portfolio Management of Sequential Innovations

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  • Jinyoung Kim

    () (Korea University)

Abstract

This paper develops a model for understanding a firm's decisions regarding the maintenance (renewal) and patenting of sequential innovations and studies how these decisions are affected by the model's parameters, including maintenance fees and filing fees. The model demonstrates that the two prices exert negative effects on renewal and patenting, respectively (i.e. adverse own price effects). The model also offers a discriminating testable hypothesis, predicted on the cross-price effects, to identify complementarity or substitutability across sequential innovations. Our regression results show that the probability of patent renewal and maintenance fees are correlated negatively and that the patent propensity and application fees are correlated negatively. We also demonstrate that higher application fees are associated with lower probability of patent renewal, which corroborates the case of complementarity in sequential innovations.

Suggested Citation

  • Jinyoung Kim, 2010. "Patent Portfolio Management of Sequential Innovations," Discussion Paper Series 1005, Institute of Economic Research, Korea University.
  • Handle: RePEc:iek:wpaper:1005
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    File URL: http://econ.korea.ac.kr/~ri/WorkingPapers/w1005.pdf
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    References listed on IDEAS

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    4. Claude Crampes & Corinne Langinier, 1998. "Information Disclosure in the REnewal of Patent," Annals of Economics and Statistics, GENES, issue 49-50, pages 265-288.
    5. Yi Deng, 2003. "A Dynamic Stochastic Analysis of International Patent Application and Renewal Processes," Computing in Economics and Finance 2003 189, Society for Computational Economics.
    6. Suzanne Scotchmer, 1999. "On the Optimality of the Patent Renewal System," RAND Journal of Economics, The RAND Corporation, vol. 30(2), pages 181-196, Summer.
    7. Lanjouw, Jean O & Schankerman, Mark, 2004. "Protecting Intellectual Property Rights: Are Small Firms Handicapped?," Journal of Law and Economics, University of Chicago Press, vol. 47(1), pages 45-74, April.
    8. Langinier, Corinne, 2004. "Are patents strategic barriers to entry?," Journal of Economics and Business, Elsevier, vol. 56(5), pages 349-361.
    9. Eugenio J. Miravete & José C. Pernías, 2006. "INNOVATION COMPLEMENTARITY AND SCALE OF PRODUCTION -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 54(1), pages 1-29, March.
    10. Jinyoung Kim & Gerald Marschke, 2005. "Labor Mobility of Scientists, Technological Diffusion, and the Firm's Patenting Decision," RAND Journal of Economics, The RAND Corporation, vol. 36(2), pages 298-317, Summer.
    11. Pakes, Ariel S, 1986. "Patents as Options: Some Estimates of the Value of Holding European Patent Stocks," Econometrica, Econometric Society, vol. 54(4), pages 755-784, July.
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    13. Ted O'Donoghue & Suzanne Scotchmer & Jacques-François Thisse, 1998. "Patent Breadth, Patent Life, and the Pace of Technological Progress," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(1), pages 1-32, March.
    14. repec:adr:anecst:y:1998:i:49-50 is not listed on IDEAS
    15. Liu, Kun & Arthurs, Jonathan & Cullen, John & Alexander, Roger, 2008. "Internal sequential innovations: How does interrelatedness affect patent renewal?," Research Policy, Elsevier, vol. 37(5), pages 946-953, June.
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    More about this item

    Keywords

    Renewal; Patenting; Sequential innovations; Patent portfolio; Patent maintenance fees; Application filing fees;

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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