Patent Value and Citations: Creative Destruction or Strategic Disruption?

Abstract

Prior work suggests that more valuable patents are cited more and this view has become standard in the empirical innovation literature. Using an NPE-derived dataset with patentspecific revenues we find that the relationship of citations to value in fact forms an inverted-U, with fewer citations at the high end of value than in the middle. Since the value of patents is concentrated in those at the high end, this is a challenge to both the empirical literature and the intuition behind it. We attempt to explain this relationship with a simple model of innovation, allowing for both productive and strategic patents. We find evidence of greater use of strategic patents where it would be most expected: among corporations, in fields of rapid development, in more recent patents and where divisional and continuation applications are employed. These findings have important implications for our basic understanding of growth, innovation, and intellectual property policy.JEL Codes: O3, L2, K1.

Patent Trolls: Evidence from Targeted Firms

“…10 Using data obtained from an NPE (but not studying NPEs, per se), Abrams, Akcigit, and Popadak (2013) found an inverted-U relationship between patent citations and patent value (as measured in terms of associated revenue).…”

What do patent-based measures tell us about product commercialization? Evidence from the pharmaceutical industry

“…The regressions based on this subsample lead to largely comparable findings regarding the main indicators of value and uncertainty. Second, the effect of citations and references might be non-linear (Abrams, Akcigit, and Popadak 2013). As a very simplistic robustness test, we repeated the regressions in table 4 including only indicators for at least one citation/self-citation and at least one X/Y reference instead of counts and shares thereof.…”

Taxation and the International Mobility of Inventors

“…Constructing Quality Measures for Inventors.-Citations received have traditionally been used as measures of the economic and technological significance of a patent (see Pakes 1986;Schankerman and Pakes 1986;Trajtenberg 1990;Harhoff et al 1999;Hall, Jaffe, and Trajtenberg 2001;Bessen 2008;Kogan et al 2012;Moser, Ohmstedt, and Rhode 2015;Abrams, Akcigit, and Popadak 2013). We construct four different dynamic measures of the inventor's quality, which place different importance on the quantity versus value of an inventor's patents.…”