Valuing Patents and Trademarks in Complex Production Chains

36 Pages Posted: 12 Dec 2015 Last revised: 22 Jun 2018

Ben Klemens

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

Date Written: June 15, 2018

Abstract

This article presents a new theoretical framework for evaluating the proportion of a product's surplus attributable to intellectual property (IP, such as patents or trademarks). In a multi-step production process, learning by doing allows a leading firm to gain some surplus without IP, and as the number of steps approaches infinity, that surplus approaches the full value of the product. As a product increases in complexity, the ratio of the value of IP for rent extraction by a lagging firm to value for maintaining a monopoly by a leading firm diverges to infinity. The model may offer a better guide for policy because it closely reflects the empirically observed differences between the use patterns of IP in industries based on discrete versus complex products.

Keywords: intellectual property, patent valuation, trademark valuation, production chains, learning by doing

JEL Classification: C65, D450, K110, O340

Suggested Citation

Klemens, Ben, Valuing Patents and Trademarks in Complex Production Chains (June 15, 2018). 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

Register to save articles to
your library

Register

Paper statistics

Downloads
90
rank
264,869
Abstract Views
610
PlumX