How to Count Patents and Value Intellectual Property: Uses of Patent Renewal and Application Data

33 Pages Posted: 18 Nov 1996 Last revised: 4 Oct 2010

See all articles by Jean O. Lanjouw

Jean O. Lanjouw

University of California, Berkeley, College of Natural Resources, Department of Agricultural & Resource Economics (Deceased); Yale University, Faculty of Arts & Sciences, Department of Economics (Deceased); Brookings Institution (Deceased)

Ariel Pakes

National Bureau of Economic Research (NBER); Harvard University - Department of Economics

Jonathan Putnam

Yale University

Date Written: September 1996

Abstract

Patent counts are very imperfect measures of innovative output. This paper discusses how additional data-the number of years a patent is renewed and the number of countries in which protection for the same invention is sought - can be used to improve on counts in studies which require a measure of the extent of innovation. A simple renewal based weighting scheme is proposed which may remove half of the noise in patent counts as a measure of innovative output. The paper also illustrates how these data can be used to estimate the value of the proprietary rights created by the patent laws. The parameters estimated in this analysis can be used to answer a series of questions related to the value of patents. We illustrate with estimates of how the value of patent protection would vary under alternative legal rules and renewal fees, and with estimates of the international flows of returns from the patent system. Recent progress in the development of databases has increased the potential for this type of analysis.

Suggested Citation

Lanjouw, Jean Olson and Pakes, Ariel and Putnam, Jonathan, How to Count Patents and Value Intellectual Property: Uses of Patent Renewal and Application Data (September 1996). NBER Working Paper No. w5741. Available at SSRN: https://ssrn.com/abstract=3509

Jean Olson Lanjouw (Contact Author)

University of California, Berkeley, College of Natural Resources, Department of Agricultural & Resource Economics (Deceased)

Yale University, Faculty of Arts & Sciences, Department of Economics (Deceased) ( email )

28 Hillhouse Ave
New Haven, CT 06520-8264
United States
203-432-3568 (Phone)
203-432-6323 (Fax)

Brookings Institution (Deceased)

Ariel Pakes

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Harvard University - Department of Economics ( email )

Littauer Center
Room 117
Cambridge, MA 02138
United States
617-495-5320 (Phone)
617-495-8570 (Fax)

Jonathan Putnam

Yale University ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States

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