The Economic Value of Patent Portfolios
Dietmar Harhoff () and
No 9264, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Patent holders may choose to protect innovations with single patents or to develop portfolios of multiple, related inventions. We propose a simple decision-making model in which patent-holders may allocate resources to either expanding the number of related patents or investing in higher value of patents in the portfolio. We estimate the derived value equation using portfolio value data from an inventor survey. We find that investments in individual inventions exhibit diminishing returns, and that much of the value of a portfolio depends on adding new inventions. These effects are less pronounced in high-techology industries, when the inventions rely on external information, and when the inventor holds a doctorate. We also find higher returns to an increase of the number of inventions when firms perceive patent protection to be strong. Thus, a higher number of inventions in a portfolio may reflect both genuine creation of value or stronger appropriability via patents.
Keywords: intellectual property rights; inventors; patents; technical change (search for similar items in EconPapers)
JEL-codes: L20 O31 O33 O34 (search for similar items in EconPapers)
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Journal Article: The economic value of patent portfolios (2017)
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