Patent Acquisitions under Uncertainty: The Case of Requests for Examination

Masayo Kani ()
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Masayo Kani: Graduate School of Economics, Osaka University

No 07-06, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: Under the Japanese patent system, an applicant has to request examination within a given period of time after application. This paper studies the timing of a request for examination when return on patent is uncertain. When a firm files a patent application, it acquires a timing option limited for a fixed period and can exercise it at anytime. After modeling a real options model of the request for examination, we estimate it based on micro patent application data. The paper finds that the request for examination is deferred when uncertainty increases. We also find that the probability of requesting examination rises as the time limit approaches since the option value declines with time and falls down to zero at the time limit.

Keywords: patent; request for examination; real options; and duration analysis (search for similar items in EconPapers)
JEL-codes: C41 L21 O34 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2007-02
New Economics Papers: this item is included in nep-ipr and nep-pr~
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