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What is a Patent Worth? Evidence from the U.S. Patent “Lottery”

Listed author(s):
  • Joan Farre-Mensa
  • Deepak Hegde
  • Alexander Ljungqvist
Registered author(s):

    We provide evidence on the value of patents to startups by leveraging the random assignment of applications to examiners with different propensities to grant patents. Using unique data on all first-time applications filed at the U.S. Patent Office since 2001, we find that startups that win the patent “lottery” by drawing lenient examiners have, on average, 55% higher employment growth and 80% higher sales growth five years later. Patent winners also pursue more, and higher quality, follow-on innovation. Winning a first patent boosts a startup’s subsequent growth and innovation by facilitating access to funding from VCs, banks, and public investors.

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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 23268.

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    Date of creation: Mar 2017
    Handle: RePEc:nbr:nberwo:23268
    Note: CF LE PR
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