What Is a Patent Worth? Evidence from the U.S. Patent 'Lottery'
74 Pages Posted: 17 Dec 2015 Last revised: 9 Jul 2019
There are 3 versions of this paper
What Is a Patent Worth? Evidence from the U.S. Patent 'Lottery'
The Bright Side of Patents
The Bright Side of Patents
Date Written: June 25, 2019
Abstract
We provide evidence on the value of patents to startups by leveraging the quasi-random assignment of applications to examiners with different propensities to grant patents. Using unique data on all first-time applications filed at the U.S. Patent Office since 2001, we find that startups that win the patent “lottery” by drawing lenient examiners have, on average, 55% higher employment growth and 80% higher sales growth five years later. Patent winners also pursue more, and higher quality, follow-on innovation. Winning a first patent boosts a startup’s subsequent growth and innovation by facilitating access to funding from VCs, banks, and public investors.
Keywords: Patents, innovation, R&D, entrepreneurship, venture capital
JEL Classification: D23, G24, L26, O34
Suggested Citation: Suggested Citation