Working Paper: CEPR ID: DP9264
Authors: Alfonso Gambardella; Dietmar Harhoff; Bart Verspagen
Abstract: 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
JEL Codes: L20; O31; O33; O34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Investments in individual inventions (O31) | Economic value of individual inventions (O39) |
| Value of a patent portfolio significantly depends on the addition of new inventions (O34) | Economic value of patent portfolio (O34) |
| Returns from increasing the number of inventions in a portfolio are higher when firms perceive patent protection to be strong (O31) | Economic value derived from the number of patents (O39) |
| Technological opportunities, availability of information, and educational background of inventors (O36) | Economic value of individual inventions (O39) |