Abstract

http://ssrn.com/abstract=426020
 
 

Citations (21)



 
 

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Valuable Patents


John R. Allison


University of Texas - McCombs School of Busniess

Mark A. Lemley


Stanford Law School

Kimberly A. Moore


affiliation not provided to SSRN

R. Derek Trunkey


CBO; GW Department of Economics


Georgetown Law Journal, Vol. 92, p. 435, 2004
George Mason Law & Economics Research Paper No. 03-31
UC Berkeley Public Law Research Paper No. 133

Abstract:     
While the theory of the patent system is premised on the idea that patents will be used to exclude competitors, only a tiny fraction of patents are ever enforced. Legal and economic scholars have theorized as to how to identify valuable patents based on their individual characteristics. In this paper, we present the results of the largest empirical study ever conducted of the patent system. We compare the characteristics of litigated patents to those of issued patents generally, and we find important differences in a range of dimensions. These data confirm some predictions in the literature regarding patent value and refute others. New patents are more likely to be litigated than old patents. Foreign patent owners are less likely to litigate than domestic patent owners. Patents that issue to individuals or small companies are much more likely to be litigated than those that issue to big companies, though many of those patents have changed hands by the time they are brought to court. Patents that cite more prior art are more likely to be litigated, and those that are litigated tend to be cited more elsewhere. Most significantly, there are substantial differences between industries in the likelihood of patent litigation. Patents in the mechanical, computer, and medical device industries are significantly more likely to be litigated, for example, than patents in the chemical and semiconductor industries.

In the paper, we explore the implications of these findings in detail. Taken together, the data give a profile of a few valuable patents that stand out from a field of ordinary ones. They are the patents that their owners spend the most time and money in prosecuting. They are the ones that competitors recognize as most important. They are concentrated in a few industries in which patents play a more significant role in encouraging innovation. And they are patents that issue to individuals or small companies with asymmetric stakes in patent litigation, not to large companies. These conclusions in turn have significant implications for the design of the patent system, patent reform efforts and patent valuation theories - implications we consider at the end of the paper.

Number of Pages in PDF File: 60

Keywords: patents, patent valuation, patent litigation, intellectual property

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Date posted: July 30, 2003  

Suggested Citation

Allison, John R. and Lemley, Mark A. and Moore, Kimberly A. and Trunkey, R. Derek, Valuable Patents. Georgetown Law Journal, Vol. 92, p. 435, 2004; George Mason Law & Economics Research Paper No. 03-31; UC Berkeley Public Law Research Paper No. 133. Available at SSRN: http://ssrn.com/abstract=426020 or http://dx.doi.org/10.2139/ssrn.426020

Contact Information

John R. Allison
University of Texas - McCombs School of Busniess ( email )
CBA 5.202
University of Texas at Austin
Austin, TX 78712
United States
Mark A. Lemley (Contact Author)
Stanford Law School ( email )
559 Nathan Abbott Way
Stanford, CA 94305-8610
United States
Kimberly A. Moore
affiliation not provided to SSRN
Robert Derek Trunkey
CBO ( email )
Ford House Office Building
2nd & D Streets, SW
Washington, DC 20515-6925
United States
202 226 2916 (Phone)
202 226 1960 (Fax)
GW Department of Economics ( email )
Monroe Hall, Suite 340
2115 G Street, NW
Washington, DC 20052
United States
703-585-6048 (Phone)
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