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Patent Hunters

Author

Listed:
  • Lauren Cohen
  • Umit Gurun
  • Katie Moon
  • Paula Suh

Abstract

Analyzing millions of patents granted by the USPTO between 1976 and 2020, we find a pattern where specific patents only rise to prominence after considerable time has passed. Amongst these late-blooming influential patents, we show that there are key players (patent hunters) who consistently identify and develop them. Although initially overlooked, these late-blooming patents have significantly more influence on average than early-recognized patents and are associated with significantly more new product launches. Patent hunters, as early detectors and adopters of these late-blooming patents, are also associated with significant positive rents. Their adoption of these overlooked patents is associated with a 6.4% rise in sales growth (t = 3.02), a 2.2% increase in Tobin’s Q (t = 3.91), and a 2.2% increase in new product offerings (t = 2.97). We instrument for patent hunting, and find strong evidence that these benefits are causally due to patent hunting. The rents associated with patent hunting on average exceed those of the original patent creators themselves. Patents hunted are closer to the core technology of patent hunters, more peripheral to writers, and in less competitive spaces. Lastly, patent hunting appears to be a persistent firm characteristic and to have an inventor-level component.

Suggested Citation

  • Lauren Cohen & Umit Gurun & Katie Moon & Paula Suh, 2024. "Patent Hunters," NBER Working Papers 32965, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:32965
    Note: CF PR
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    More about this item

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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