Patent Value and Citations: Creative Destruction or Strategic Disruption?

78 Pages Posted: 8 Nov 2013 Last revised: 31 Oct 2019

See all articles by David Abrams

David Abrams

University of Pennsylvania Carey Law School

Ufuk Akcigit

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); Center for Economic and Policy Research (CEPR)

Jillian Grennan

Santa Clara University, Leavey School of Business; Santa Clara University School of Law; University of California, Berkeley, Haas School of Business, Institue for Business and Social Impact

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Date Written: October 29, 2019

Abstract

Patent citations often proxy for the value of innovation, and the very need for a proxy demonstrates the difficulty of getting direct measures. We value patents using novel data from non-practicing entities (NPEs) licensing revenues, the largest sample with direct measures analyzed to date. We find an inverted-U relationship between value and citations, with fewer citations at the high end of value than in the middle. We develop a model that offers a potential explanation: a mixture of productive patents produced by entrepreneurs to extend knowledge and strategic patents produced by incumbents to protect market share and discourage follow-on innovations.

Keywords: innovation, patents, creative destruction, citations, patent value, industrial competition, intellectual property, entrepreneurship, strategic patenting

JEL Classification: O3, L2, K1

Suggested Citation

Abrams, David S. and Akcigit, Ufuk and Grennan, Jillian, Patent Value and Citations: Creative Destruction or Strategic Disruption? (October 29, 2019). PIER Working Paper No. 13-065, U of Penn, Inst for Law & Econ Research Paper No. 13-23, Available at SSRN: https://ssrn.com/abstract=2351809 or http://dx.doi.org/10.2139/ssrn.2351809

David S. Abrams

University of Pennsylvania Carey Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States

Ufuk Akcigit (Contact Author)

University of Chicago - Department of Economics ( email )

1126 E. 59th St
Chicago, IL 60637
United States

HOME PAGE: http://www.ufukakcigit.com

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Center for Economic and Policy Research (CEPR) ( email )

London
United Kingdom

Jillian Grennan

Santa Clara University, Leavey School of Business ( email )

Santa Clara, CA 95053
United States

Santa Clara University School of Law ( email )

500 El Camino Real
Santa Clara, CA 95053
United States

University of California, Berkeley, Haas School of Business, Institue for Business and Social Impact

Berkeley, CA 94720
United States

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