This paper provides novel empirical evidence on the private value of patents and R&D in Europeanfirms during the period 1991-2004. We explore the relationship between firm's stock market value,patents, and "quality"-weighted patents issued by the European Patent Office (EPO) and the US Patentand Trademark Office (USPTO). We find that Tobin's q is positively and significantly associated withR&D and patent stocks, but that only those patents taken out in both patent offices or at the USPTOalone seem to be valued. Either forward citations or a composite quality indicator based on forwardcitations, family size and the number of technical fields covered by the patent are modestly informativefor value. Software patents account for a rising share of total patents in the USPTO and EPO. Moreover,some scholars of innovation and intellectual property rights argue that software and business methodspatents on average are of poor quality and that these patents are applied for merely to build portfoliosrather than for protection of real inventions. We found that such patents are considerably more valuablethan ordinary patents, especially if they are taken out in the U.S. However their quality indicators areno more valuable than those of other patents, suggesting that their primary purpose may be to increasethe size of the patent portfolio.
The market value of patents and R&D: evidence from European firms
THOMA, Grid;
2007-01-01
Abstract
This paper provides novel empirical evidence on the private value of patents and R&D in Europeanfirms during the period 1991-2004. We explore the relationship between firm's stock market value,patents, and "quality"-weighted patents issued by the European Patent Office (EPO) and the US Patentand Trademark Office (USPTO). We find that Tobin's q is positively and significantly associated withR&D and patent stocks, but that only those patents taken out in both patent offices or at the USPTOalone seem to be valued. Either forward citations or a composite quality indicator based on forwardcitations, family size and the number of technical fields covered by the patent are modestly informativefor value. Software patents account for a rising share of total patents in the USPTO and EPO. Moreover,some scholars of innovation and intellectual property rights argue that software and business methodspatents on average are of poor quality and that these patents are applied for merely to build portfoliosrather than for protection of real inventions. We found that such patents are considerably more valuablethan ordinary patents, especially if they are taken out in the U.S. However their quality indicators areno more valuable than those of other patents, suggesting that their primary purpose may be to increasethe size of the patent portfolio.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
