Saturday, July 29, 2006

Patent value & court decisions

A recent bump in traffic has come from someone posting about my citation/value research in Silicon Investor.

One reply to the thread said this : "interesting blog... It is, and goes back to the Glimstedt study of citations, but I'd be happier if he were listing court decisions based on the citation method of valuation."

Actually the citation method is tied to court decisions, it was just not the focus of this particular research paper. I am only posting a brief summary of the full paper here, hence you didn't see the link back to the references which ties litigated patents (which I will loosely interchange with court decisions here) and citations. For your reference here's the portion of my research that ties them together:

It has been suggested that given the high cost of litigation, patents which are litigated are also typically considered valuable patents. Research with litigated patents have been correlated to high patent citations (Lanjouw and Schankerman 1997; Allison, Lemley et al. 2004) with Allison arguing strongly for the bi-directional relationship between litigated patents and value. Their research argument is based on the premise of the high relative cost of litigation as compared to the cost of merely obtaining the patent with almost 75x the cost to enforce through litigation compared to filing.

An interesting step in the research would be to dive more deeply into the litigated patents and pull out the citation counts, ultimatly seeing if there is a model that can be developed for monetary settlements and citations.

References above:
Lanjouw, J. O. and M. Schankerman (1997). "Stylized facts of patent litigation: value, scope, ownership." NBER Working Paper (No. 6297).
Allison, J. R., M. A. Lemley, et al. (2004). "Valuable Patents." Georgetown Law Journal 92(3): 435.


AMIT said...

Good informative post.

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