Patent Value and Citations: Creative Destruction or Strategic Disruption?

59 Pages Posted: 8 Nov 2013 Last revised: 4 Dec 2018

See all articles by David Abrams

David Abrams

University of Pennsylvania 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

Duke University - Fuqua School of Business; Duke Innovation & Entrepreneurship Initiative

Multiple version iconThere are 2 versions of this paper

Date Written: December 4, 2018

Abstract

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

Abrams, David S. and Akcigit, Ufuk and Grennan, Jillian, Patent Value and Citations: Creative Destruction or Strategic Disruption? (December 4, 2018). 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 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

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

Duke Innovation & Entrepreneurship Initiative ( email )

215 Morris St., Suite 300
Durham, NC 27701
United States

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