Valuing Patents and Trademarks in Complex Production Chains

23 Pages Posted: 12 Dec 2015 Last revised: 8 Oct 2016

Ben Klemens

U.S. Department of the Treasury, Office of Tax Analysis (OTA)

Date Written: October 6, 2016

Abstract

Patents and trademarks are a right to exclude others from using a brand or an invention, but are distinct from the underlying brand or invention itself. This paper presents a theoretical framework for evaluating the value of the right to exclude as a proportion of the overall value of a good. Valuations are context-dependent: the value of patent and trademark protection, in absolute terms and as a proportion of overall product value, is lower for intangibles that are components of complex products. As the complexity of production increases, the relative value of the right to exclude approaches zero.

Keywords: patents, complex inventions

JEL Classification: O34, D42

Suggested Citation

Klemens, Ben, Valuing Patents and Trademarks in Complex Production Chains (October 6, 2016). Available at SSRN: https://ssrn.com/abstract=2702102 or http://dx.doi.org/10.2139/ssrn.2702102

Ben Klemens (Contact Author)

U.S. Department of the Treasury, Office of Tax Analysis (OTA) ( email )

1500 Pennsylvania Ave., N.W.
Washington, DC 22203
United States

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