Working Paper: NBER ID: w5741
Authors: Jean O. Lanjouw; Ariel Pakes; Jonathan Putnam
Abstract: Patent counts are very imperfect measures of innovative output. This paper discusses how additional data-the number of years a patent is renewed and the number of countries in which protection for the same invention is sought - can be used to improve on counts in studies which require a measure of the extent of innovation. A simple renewal based weighting scheme is proposed which may remove half of the noise in patent counts as a measure of innovative output. The paper also illustrates how these data can be used to estimate the value of the proprietary rights created by the patent laws. The parameters estimated in this analysis can be used to answer a series of questions related to the value of patents. We illustrate with estimates of how the value of patent protection would vary under alternative legal rules and renewal fees, and with estimates of the international flows of returns from the patent system. Recent progress in the development of databases has increased the potential for this type of analysis.
Keywords: patents; innovation; intellectual property; renewal data
JEL Codes: O31; O34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| use of additional data (Y10) | measurement of innovative output (O36) |
| renewal-based weighting scheme (C41) | noise in patent counts (O34) |
| patent characteristics (O34) | renewal decisions (Q21) |
| legal framework governing patents (K11) | renewal decisions (Q21) |
| renewal decisions (Q21) | economic returns (D33) |