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Selling patents at auction: an empirical analysis of patent value

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  • Cristina Odasso
  • Giuseppe Scellato
  • Elisa Ughetto

Abstract

This article analyzes the impact of patent bibliographic indicators and patent characteristics on the economic value of patents put on sale in an auction, considering different typologies of sellers and buyers. A unique data set covering all patent auctions held until the end of 2008 by Ocean Tomo is used. We employ two measures of patent value drawn from the auction process: the offer price (ex ante value set by the seller) and the closing price (the market value determined by the buyers) of patent lots. We find a positive correlation between forward citations and the economic value of patents (in terms of both the lot offer price and the lot closing price), while backward citations have a positive and significant impact only on the lot offer price. The number of claims is positively related to the lot closing price and the effect is significant only for the fraction of buyers who are nonpracticing entities. The degree of technological congruence of the patents included in a lot turns out to be positively associated with the probability that the lot is sold and has a positive effect on both the lot offer price and the lot closing price. We also find a significant impact of the extent of the residual life of patents on the lot closing price. The effect is driven by the subsample of nonpracticing entities as buyers. Finally, the extension of patent protection to other jurisdictions, as captured by the size of the patent family, is positively associated with both the lot offer price and the lot closing price.

Suggested Citation

  • Cristina Odasso & Giuseppe Scellato & Elisa Ughetto, 2015. "Selling patents at auction: an empirical analysis of patent value," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 24(2), pages 417-438.
    • Handle: RePEc:oup:indcch:v:24:y:2015:i:2:p:417-438.
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    File URL: http://hdl.handle.net/10.1093/icc/dtu015
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    Citations

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    Cited by:

    1. Grashuis Jasper & Dary Stanley, 2019. "Patented Innovation and Firm Value in the U.S. Food and Drink Industry: The Economic Importance of High-Quality Product Innovation," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 17(2), pages 1-14, November.
    2. Shen, Huijun & Coreynen, Wim & Huang, Can, 2023. "Prestige and technology-transaction prices: Evidence from patent-selling by Chinese universities," Technovation, Elsevier, vol. 123(C).
    3. Figueroa, Nicolás & Serrano, Carlos J., 2019. "Patent trading flows of small and large firms," Research Policy, Elsevier, vol. 48(7), pages 1601-1616.
    4. Bronwyn H Hall, 2019. "Is there a role for patents in the financing of new innovative firms?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 28(3), pages 657-680.
    5. Banerjee, Swapnendu & Poddar, Sougata, 2019. "‘To sell or not to sell’: Licensing versus selling by an outside innovator," Economic Modelling, Elsevier, vol. 76(C), pages 293-304.
    6. Chau Le & Bach Nguyen & Vinh Vo, 2024. "Do intangible assets help SMEs in underdeveloped markets gain access to external finance?—the case of Vietnam," Small Business Economics, Springer, vol. 62(2), pages 833-855, February.
    7. Swapnendu Banerjee & Yuanzhu Lu & Sougata Poddar, 2021. "Technology selling and innovation with bargaining," Bulletin of Economic Research, Wiley Blackwell, vol. 73(1), pages 100-107, January.
    8. Appio, Francesco Paolo & Baglieri, Daniela & Cesaroni, Fabrizio & Spicuzza, Lucia & Donato, Alessia, 2022. "Patent design strategies: Empirical evidence from European patents," Technological Forecasting and Social Change, Elsevier, vol. 181(C).
    9. Carlo Giglio & Gianluca Salvatore Vocaturo & Roberto Palmieri, 2023. "Patent Acquisitions in the Healthcare Industry: An Analysis of Learning Mechanisms," IJERPH, MDPI, vol. 20(5), pages 1-13, February.
    10. Grashuis, Jasper & Dary, Stanley Kojo, 2017. "An empirical investigation of patent and trademark ownership propensity and intensity in the U.S. food and drink industry," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 20(5).
    11. Marco, Antonio De & Scellato, Giuseppe & Ughetto, Elisa & Caviggioli, Federico, 2017. "Global markets for technology: Evidence from patent transactions," Research Policy, Elsevier, vol. 46(9), pages 1644-1654.
    12. Caviggioli, Federico & Ughetto, Elisa, 2016. "Buyers in the patent auction market: Opening the black box of patent acquisitions by non-practicing entities," Technological Forecasting and Social Change, Elsevier, vol. 104(C), pages 122-132.
    13. Shih-Chieh Fang & Dan-Wei Wen, 2018. "Untangle Multi-Organizational Collaboration From Value Co-creation," International Journal of Business Administration, International Journal of Business Administration, Sciedu Press, vol. 9(5), pages 76-87, September.
    14. Carlo Giglio & Roberto Sbragia & Roberto Musmanno & Roberto Palmieri, 2021. "Cross-country learning from patents: an analysis of citations flows in innovation trajectories," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(9), pages 7917-7936, September.

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