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Patent Acquisitions under Uncertainty: The Case of Requests for Examination

Author

Listed:
  • Masayo Kani

    (Graduate School of Economics, Osaka University)

Abstract

Under the Japanese patent system, an applicant has to request examination within a given period of time after application. This paper studies the timing of a request for examination when return on patent is uncertain. When a firm files a patent application, it acquires a timing option limited for a fixed period and can exercise it at anytime. After modeling a real options model of the request for examination, we estimate it based on micro patent application data. The paper finds that the request for examination is deferred when uncertainty increases. We also find that the probability of requesting examination rises as the time limit approaches since the option value declines with time and falls down to zero at the time limit.

Suggested Citation

  • Masayo Kani, 2007. "Patent Acquisitions under Uncertainty: The Case of Requests for Examination," Discussion Papers in Economics and Business 07-06, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:0706
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    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/0706.pdf
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    References listed on IDEAS

    as
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    2. Nagaoka, Sadao & 長岡, 貞男 & Nishimura, Yoichiro & 西村, 陽一郎, 2005. "Acquisitions and use of patents: A theory and new evidence ｆrom the Japanese firm level data," IIR Working Paper 05-14, Institute of Innovation Research, Hitotsubashi University.
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    6. James L. Paddock & Daniel R. Siegel & James L. Smith, 1988. "Option Valuation of Claims on Real Assets: The Case of Offshore Petroleum Leases," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(3), pages 479-508.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    patent; request for examination; real options; and duration analysis;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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