Patent Value and Citations: Creative Destruction or Strategic Disruption?
59 Pages Posted: 8 Nov 2013 Last revised: 4 Dec 2018
Date Written: December 4, 2018
Prior work suggests that more valuable patents are cited more. Using novel revenue data for tens of thousands of patents held by non-practicing entities (NPEs), we find that the relationship between citations and value forms an inverted-U, with fewer citations at the high end of value than in the middle. We explain the inverted-U with a model of innovation that has productive and strategic patents. Empirically, we observe more strategic patents where the model predicts: among inventors in fields of rapid development and where divisional applications are employed. These findings have important implications for our understanding of growth, innovation, intellectual property policy, and patent valuation.
Keywords: productive innovation, defensive innovation, patents, creative destruction, citations, patent value, competition, intellectual property, entrepreneurship, strategic patenting, defensive patenting, patent thickets, fencing patents
JEL Classification: O3, L2, K1
Suggested Citation: Suggested Citation