patlib 2003 21-23 may, palais des congrès, liège patent based economic indicators : what do they...

PATLIB 200321-23 May, Palais des Congrès, Liège

Patent based economic indicators : Patent based economic indicators : WWhat do they tell us ?hat do they tell us ?

Michele Cincera and Bruno van PottelsbergheUniversité Libre de Bruxelles

OBJECTIVEOBJECTIVE

• Patents statistics as economic indicator: a survey.

OUTLINEOUTLINE

• Pro & cons of patents data.

• Patents as a measure of innovative activities.

• Determinants of patenting activities.

• Patents and technological diffusion.

• Measuring the economic value of patents.

• Conclusions.

PRO & CONS of PATENTS DATAPRO & CONS of PATENTS DATA

• Advantages :

– They are available over long time periods in many countries.

– They contain detailed information (IPC classes, inventors,…).

• Drawbacks :

– They differ greatly in their technical and economic significance.

– Not all inventions are patented, nor all are patentable.

– Other existing methods in appropriating an innovation such as industrial secrecy may be preferred.

– The propensity to patent may change substantially over time and across countries not to mention among technological sectors.

PATENTS AS A MEASURE OF INNOVATIVE PATENTS AS A MEASURE OF INNOVATIVE ACTIVITIESACTIVITIES

• Index of inventive activity:

Source: GRILICHES (1990), p. 1663.


• # of EPO high tech patent applications:


• Patenting activities of the top 50 Belgian firms (EPO and USPTO, 1980-2000)


•Top 20 Belgian firms (EPO and US applications, 1980-2000)Rank EPO C% USPTO C%

1 Agfa-Gevaert 15.6 Agfa-Gevaert 24.4 2 Solvay 22.0 Solvay 34.7 3 Janssen Pharmaceutica 25.4 Janssen Pharmaceutica 42.2 4 Fina Research 27.7 Bekaert 44.9 5 Bekaert 29.8 Fina Research 47.6 6 Alcatel/Bell Telephone 31.6 Picanol 50.1 7 IMEC 33.4 Glaverbel 52.4 8 Ford New Holland 35.2 Raychem 54.6 9 Picanol 37.0 Staar 56.4

10 Raychem 38.6 Centre de Recherches Metallurgiques 58.0 11 Smithkline Biologicals 40.0 UCB 59.7 12 Centre de Recherches Metallurgiques 41.3 IMEC 60.9 13 Innogenetics 42.3 Plant Genetic Systems 61.9 14 Heraeus Electro-Nite International 43.3 Michel Van de Wiele 62.9 15 ACEC 44.2 Dow Corning 63.8 16 Esselte 45.1 Esselte 64.7 17 UCB 45.9 Metallurgie Hoboken-Overpelt 65.6 18 Sofitech 46.7 Fabrique National Herstal 66.5 19 Xeikon 47.5 Texaco Belgium 67.2 20 Michel Van de Wiele 48.2 Innogenetics 67.9

Note: C% = cumulative share; the companies in italics are in only one of the top 20 rankings.Sources: EPO and USPTO databases; own calculations


•TechnologicalRevealedComparativeAdvantage(TRCA):

1 9 8 0 - 1 9 8 5 1 9 8 6 - 1 9 9 0 1 9 9 1 - 1 9 9 6 r a n k I P C % T R C A I P C % T R C A I P C % T R C A

1 B r u s h w a r e 0 . 9 1 1 . 7 W e a v i n g 5 . 0 2 1 . 0 R o p e s a n d c a b l e s 0 . 4 1 6 . 3

2 R o p e s ; c a b l e s 0 . 2 7 . 4 R o p e s a n d c a b l e s 0 . 5 2 0 . 3 W e a v i n g 3 . 0 1 2 . 3

3 O i l s , d e t e r g e n t s a n d c a n d l e s

2 . 8 5 . 6 B r u s h w a r e 0 . 7 7 . 9 B r u s h w a r e 0 . 5 8 . 3

4 W e a v i n g 1 . 5 5 . 6 S u g a r i n d u s t r y 0 . 2 6 . 0 S u g a r i n d u s t r y 0 . 1 6 . 8

5 E x p l o s i v e s 0 . 3 5 . 4 I n s t r u m e n t s 0 . 1 5 . 1 P h o t o g r a p h y 1 3 . 0 4 . 8

6 M a c h i n e s a n d e n g i n e s

0 . 9 4 . 6 M i n i n g 2 . 9 4 . 9 P r i n t i n g 6 . 0 3 . 8

7 C l e a n i n g 0 . 1 3 . 9 M e t a l l u r g y 1 . 4 3 . 9 M e t a l l u r g y 0 . 9 3 . 7

8 S u g a r i n d u s t r y 0 . 2 3 . 6 C o m b u s t i o n a p p a r a t u s

1 . 7 3 . 8 S a d d l e r y a n d u p h o l s t e r y

0 . 0 3 . 3

9 H e a t i n g 3 . 1 3 . 6 H e a t i n g 1 . 8 3 . 7 A g r i c u l t u r e 4 . 1 3 . 0

1 0 A g r i c u l t u r e 5 . 4 3 . 0 H e a t e x c h a n g e 0 . 9 3 . 5 E l e c t r o l y t i c p r o c e s s e s

0 . 7 2 . 7

1 1 M e t a l l u r g y 1 . 3 2 . 9 O i l s , d e t e r g e n t s a n d c a n d l e s

1 . 7 3 . 1 M i n i n g 1 . 1 2 . 3

1 2 S p o r t , g a m e s 1 . 9 2 . 8 P h o t o g r a p h y 6 . 6 3 . 1 W e a p o n s 0 . 4 2 . 1

1 3 P h o t o g r a p h y 5 . 6 2 . 6 E l e c t r o l y t i c p r o c e s s e s

1 . 4 3 . 1 B u t c h e r i n g 0 . 3 2 . 0

1 4 B u i l d i n g 3 . 0 2 . 3 S p r a y i n g , a t o m i s i n g

0 . 1 2 . 9 S e w i n g 0 . 2 2 . 0

1 5 H e a t e x c h a n g e 0 . 8 2 . 3 A g r i c u l t u r e 4 . 7 2 . 9 B u i l d i n g 1 . 8 1 . 9

1 6 W e a p o n s 0 . 8 2 . 3 H e a d w e a r 0 . 1 2 . 8 I n o r g a n i c c h e m i s t r y

1 . 1 1 . 9

1 7 A m m u n i t i o n 0 . 5 2 . 3 D r y i n g 0 . 2 2 . 7 C a s t i n g 0 . 8 1 . 7

1 8 L i f e - s a v i n g 0 . 4 2 . 2 H y d r a u l i c e n g i n e e r i n g

0 . 9 2 . 6 B a k i n g 0 . 2 1 . 7

1 9 H y d r a u l i c e n g i n e e r i n g

0 . 9 2 . 2 S a d d l e r y a n d u p h o l s t e r y

0 . 0 2 . 4 B i o c h e m i s t r y 3 . 6 1 . 5

2 0 C o n s t r u c t i o n s 0 . 8 2 . 2 W e a p o n s 0 . 7 2 . 4 D y e s a n d p a i n t s 2 . 2 1 . 5

N o t e s : % = s h a r e ;

j i jijij

iijijij nnnnTRCA // / ,

w h e r e n i j i s t h e n u m b e r o f p a t e n t s o f c o u n t r y j i n t h e i - t h t e c h n o l o g i c a l c l a s s , a l l c o u n t r i e s .

S o u r c e : E P O , o w n c a l c u l a t i o n s .

DETERMINANTS OF PATENTING ACTIVITIESDETERMINANTS OF PATENTING ACTIVITIESR&D and determinants of patent outcomes:

– R&D-patent relationship; extended knowledge production functionDependent variable: number of patents Intercept -8.2 (.967)* -5.3 (.664)* -4.3 (.576)* -7.3 (1.32)* -5.5 (.849)* -4.4 (.734)* Intramural R&D .66 (.098)* Research .15 (.033)* Development .26 (.065)* Product .15 (.052)* Process .02 (.041) Other .09 (.038)* Personnel .55 (.195)* Investment -.02 (.085) Organisation .05 (.046) Own funds .29 (.104)* .21 (.073)* Extern. Funds .121 (.042)*

Firms .08 (.029)* Government -.01 (.024)

RTOs and HEIs -.30 (.094)* Extramural R&D .16 (.034)* .20 (.034)* .23 (.039)* .17 (.037)* .17 (.036)*

Firms .08 (.025)* Collective research centres -.03 (.031)

RTOs and HEIs .13 (.020)* K .88 (.111)* .86 (.111)* .82 (.102)* .87 (.105)* .81 (.107)* .80 (.096)* s² 4.7 (.936)* 5.0 (.800)* 6.4 (1.08)* 4.8 (.884)* 5.7 (1.03)* 4.1 (0.78)* Loglikelihood GEC model

-448 -450 -459 -449 -455 -441

DETERMINANTS OF PATENTING ACTIVITIESDETERMINANTS OF PATENTING ACTIVITIES

R&D management literature: Patenting strategies

Strategy Definition Flooding/blanketing Efforts made to turn an area into a jungle or a minefield of patents by

“mining” every step in a manufacturing process with patents, more or less systematically. This pre-emptive strategy prevents rivals from patenting related inventions.

Strategic patenting A single patent with a large blocking power which have deterringly high or insurmountable invent-around costs.

Fencing/surrounding Important central patent fenced or surrounded by other patents, which are individually less important but collectively block the effective commercial use of the central patent, even after its expiration.

Patent networking Building of a patent portfolio in which patents of various kinds and configurations are consciously used to strengthen overall protection and bargaining power.

Sporadic versus continuous In the sporadic case, just a few patents at key steps in the R&D process are taken out. In the second case, a conscious effort is made to build up a rich patent portfolio, and patents are applied in a continuous manner in the R&D sequence.

Source: based on Granstrand (1999).

PATENTS AND TECHNOLOGICAL DIFFUSIONPATENTS AND TECHNOLOGICAL DIFFUSION

• Technological SPACE (Jaffe 1986, 88, 89) Technological position vector of firm i:

Technological proximities:

iKi1i t,...,tT

1

3

2K

kij

PT T

T T T Tij

i j'

i i'

j j'

01,

PATENTS AND TECHNOLOGICAL DIFFUSIONPATENTS AND TECHNOLOGICAL DIFFUSION

• Example:

• R&D spillovers

NPA DP SL RN HD 3272 Du Pont 1 284 Solvay 0.79 1 636 Renault 0.06 0.02 1 618 Honda 0.06 0.04 0.95 1

S P RDi ij jjj i

Internationalisation of technology

o Aspects of internationalisation: – co-invention,– co-ownership– cross-border ownership

Internationalisation of technology

General Hospital Corp.

Appl.

No.

APPLICANT(s) INVENT. SHIA

SHAI

SHII SHA

A

Name Resid. Resid.

472,807 Microsoft Corporation U.S. France (2)

U.S. (1)

X X

859,431 Colgate Palmo live Comp. U.S. Belgium (2) X

828,191 Alcatel Alsthom CGE France Germany (2) X

889,273 U.S. Philips Corporation U.S. Germany (3)

Belgium (1)

X X

463,418

Rijksuniversiteit

U.S.

Belgium

Belgium (2)

U.S. (1)

X X X

Appl.

No.


SHAI

SHII SHA

A

Name Resid. Resid.


U.S. (1)

X X




Belgium (1)

X X

Appl.

No.


SHAI

SHII SHA

A

Name Resid. Resid.


U.S. (1)

X X




Belgium (1)

X X

463,418

Rijksuniversiteit

U.S.

Belgium

Belgium (2)

U.S. (1)

X X X

0%

4%

8%

12%

1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995

Share of cross-border ownership

Share of international co-inventions

Share of international co-applications

Global trends of internationalisation

Various patterns across countries

Basic indicators, EPO, priority date 1993-95.(%) SHIA SHAI SHII SHAAAustralia 11.7 5.3 13.8 5.9Belgium 31.7 11.8 21.3 9.6Denmark 10.8 9.3 16.1 6.5Finland 5.2 7.6 8.0 2.2France 8.3 5.3 7.9 8.4Germany 6.3 4.5 6.6 5.0Iceland 92.3 16.7 37.1 33.3Ireland 26.5 37.2 21.1 11.7Japan 2.6 1.5 2.4 1.1Korea 4.5 3.4 8.4 3.0Mexico 48.1 9.2 40.4 15.4Netherlands 12.2 30.9 12.6 20.6Switzerland 12.4 26.9 18.0 5.6United Kindom 20.0 10.7 11.9 15.0United States 5.0 8.7 6.8 2.4

European Union 6.5 3.7 5.1 1.7OECD 11.7 11.7 4.7 2.2

Basic indicators, EPO, priority date 1993-95.(%) SHIA SHAI SHII SHAAAustralia 11.7 5.3 13.8 5.9Belgium 31.7 11.8 21.3 9.6Denmark 10.8 9.3 16.1 6.5Finland 5.2 7.6 8.0 2.2France 8.3 5.3 7.9 8.4Germany 6.3 4.5 6.6 5.0Iceland 92.3 16.7 37.1 33.3Ireland 26.5 37.2 21.1 11.7Japan 2.6 1.5 2.4 1.1Korea 4.5 3.4 8.4 3.0Mexico 48.1 9.2 40.4 15.4Netherlands 12.2 30.9 12.6 20.6Switzerland 12.4 26.9 18.0 5.6United Kindom 20.0 10.7 11.9 15.0United States 5.0 8.7 6.8 2.4

European Union 6.5 3.7 5.1 1.7OECD 11.7 11.7 4.7 2.2

Internationalisation of technologyInternationalisation of technology

Factors explaining cross countries differences in internationalisation:

Larger countries (by GDP) are less internationalised than smaller ones;

Technological intensity has negative effect on SHII and SHIA

Internationalisation of technologyInternationalisation of technology

“Corrected” indicators of internationalisationSHIA SHII

Highly UK [0.96] USA [1.57]internationalised Belgium [0.91] Switzerland [0.50]countries Luxembourg [0.83] Canada [0.49]

Canada [0.73]Mexico [0.53]USA [0.43]

Less Finland [-0.66] Italy [-0.63]internationalised Korea [-0.57] Finland [-0.47]countries Greece [-0.57] Japan [-0.39]

Hungary [-0.55]Italy [-0.43] (EU [-0.7])Japan [-0.43]

InternationalisationInternationalisation of technology of technology

Who mates with whom? The intensity of bilateral relationships is determined by:

Technological similarity;Geographical proximity;A common language;Being an EU Member, for cross border

ownership only.

MEASURING THE ECONOMIC VALUE OF PATENTSMEASURING THE ECONOMIC VALUE OF PATENTS

• The value distribution of patents is highly skewed

• The indicators of value are :– Patent family size,

– number of claims,

– designated states,

– co-applicants, inventors,…

– Citations

– Patent renewal data

– The number of opposition

The value of inventions and the value of patents

Inventions 1 Applic.

2 Grants

3

High value

4

5

Looking for high patent value

Opposition as an indicator of value

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