From patent renewals to applications survival: do portfolio management strategies play a role in patent length?

The decision of firms to renew their patents is largely assumed to be the result of a careful valuation exercise to balance their expected revenues with renewal fees. This article extends this line of reasoning to all patent applications filed to the EPO over a 20 years period and analyzes with a survival time model the determinants of their maintenance throughout their life, from filing to withdrawal, refusal or lapse. The results first show that the classical patent value proxies (families, claims, IPC classes and forward citations) constitute strong predictors of the entire length of patent rights and even more so before their grant than after, suggesting that the length of an application, even non granted, is indicative of its expected private value to the firm. They suggest that the IP management strategies of the firms aiming at building large portfolios or families to protect their inventions make them less selective in their renewal decisions. Finally, the results suggest that even the length of non granted applications (i.e. the duration of their examination) is significantly influenced by factors relating to their scope and importance and to the patenting strategy of the firms and is therefore partly in control of the applicant, particularly through the PCT option and the filing of divisionals.