Patent Valuation with Forecasts of Forward Citations

Falk, Nathan; Train, Kenneth

doi:10.1515/jbvela-2016-0002

Cited by 29 publications

(7 citation statements)

References 22 publications

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“…Caviggioli and Ughetto (2013) investigated the main drivers of companies' decisions to engage in patent licensing and sales transactions and then examined how improvements in the marketplace for patents and more intense involvement of patent brokers might impact the factors hindering the development of patent transactions [28]. For recently issued patents, which have not had time to accumulate citations, this [29].…”

Section: Development Of Valuation Methodsmentioning

confidence: 99%

Factors Affecting Pricing in Patent Licensing Contracts in the Biopharmaceutical Industry

et al. 2018

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This paper analyzes factors affecting pricing in patent licensing contracts in the biopharmaceutical industry based on a dataset that includes royalty-related data such as running royalty rate, up-front payment, milestones, and deal value. Data on drug candidates for 11 drug classes is obtained for regression analysis between royalty-related data and multiple input descriptors such as market factors, licensor factors, and licensee factor in order to derive the formula for predicting royalty-related estimates such as royalty rate, up-front payment, milestones, and deal value. Data is gathered from multiple sources including MedTrack and is processed through merging and cleaning. We found that the three most important factors in pricing in patent licensing in the biopharmaceutical industry are CAGR (Compound Annual Growth Rate), PDELR (Previous Deal Experience of Licensor), and AR (Attrition Rate). We found that factors in the formula used to estimate the license fee are totally different by drug class. We found that the three most important factors in the frequency in the formula used to estimate the license fee are PDELR, RnDLR (R&D Costs of Licensor), and PDELE (Previous Deal Experience of Licensee). This study suggests a method of estimating the proper royalty rate, up-front payment, milestones, and deal value of the drug candidates of 11 drug classes by using easily obtained input data.

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Section: Development Of Valuation Methodsmentioning

confidence: 99%

Factors Affecting Pricing in Patent Licensing Contracts in the Biopharmaceutical Industry

et al. 2018

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“…Assessment: Easy to manipulate; not a meaningful indicator. 42 Forward Cites 43 A patent citation reflects that an invention may be based partly on an earlier patented invention. Citations for patents are grounded technologically, as inventor applicants in the United States are required to disclose relevant prior art (which restricts the scope of their own patent).…”

Section: G Family Countsmentioning

confidence: 99%

Technological Leadership and 5G Patent Portfolios: Guiding Strategic Policy and Licensing Decisions

Teece

2021

California Management Review

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Whether it’s mobile phones or autonomous cars or telemedicine, a well-functioning robust 5G ecosystem will require licensing executives to have a deep understanding of the need for timely licensing to support technology development and adoption. It is important that the parties to patent licensing agreements understand that value doesn’t depend on the numerosity of patent portfolios, but on use value. The ecosystem is impaired when parties to licensing transactions are recalcitrant and advance bogus indicia of value. The 5G stakes are sufficiently high that top management oversight is likely required.

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“…Forward citations accrue over time as patent examiners and applicants refer to prior patents during the prosecution of new applications (Hall et al ) As such, patents that are relevant to future technologies, disclose useful information that is drawn upon by future inventors, or are in technology fields that attract extensive R&D are likely to receive citations (Falk & Train ). In turn, all these drivers of citations relate, at least in part, to the technical information disclosed in a patent.…”

Section: Strategy and Prior Scholarshipmentioning

confidence: 99%

Investigating Cohort Similarity as an Ex Ante Alternative to Patent Forward Citations

Ashtor¹

2019

J Empirical Legal Studies

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Forward citations are arguably the most widely used empirical metric for patents, including as indicators of patent information content, cumulative innovation, value, and knowledge flows. However, forward citations have major shortcomings. Citations require long time horizons to accrue, and therefore they cannot be observed until several years after a patent issues. Citation data are often noisy, discontinuous, and highly skewed, complicating empirical analysis. Moreover, recent studies have questioned the reliability of citation data. As such, the most widely used empirical metric of patents is also the most suspect. This study constructs a measure of patents that correlates with forward citations, but is observable ex ante, immediately upon patent issuance or even earlier upon publication of a patent application. In addition, this measure is continuous and evenly distributed, such that it is suitable for large-scale patent analytics applications. Finally, unlike citations, the measure is portable across patent systems, facilitating cross-border comparisons of portfolios and datasets. Specifically, I construct a measure of the similarity of a patent to its technological-temporal cohort, based on linguistic analysis of claim text. I employ advanced computational linguistic techniques to analyze the claims of all U.S. patents issued in the period 1976-2017, over 6 million patents in total, and I calculate the average degree of conceptual similarity of each patented invention to all others in the same technology field and time period cohort. I then extend the methodology to all issued EP patents, over 1.6 million in total. I validate the resulting measures against multiple established patent metrics for U.S. and EP patents. I test the robustness of this measure as a forecast for future patent citations in empirical research and big-data applications. I find that cohort similarity correlates significantly with forward citations received by both U.S. and EP patents. Cohort similarity also substitutes for citations in

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Patent Valuation with Forecasts of Forward Citations

Cited by 29 publications

References 22 publications

Factors Affecting Pricing in Patent Licensing Contracts in the Biopharmaceutical Industry

Factors Affecting Pricing in Patent Licensing Contracts in the Biopharmaceutical Industry

Technological Leadership and 5G Patent Portfolios: Guiding Strategic Policy and Licensing Decisions

Investigating Cohort Similarity as an Ex Ante Alternative to Patent Forward Citations

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