Publications
Publications
- 2017
What Is a Patent Worth? Evidence from the U.S. Patent 'Lottery'
By: Joan Farre-Mensa, Deepak Hegde and Alexander Ljungqvist
Abstract
We provide evidence on the value of patents to start-ups by leveraging the random assignment of applications to examiners with different propensities to grant patents. Using unique data on all first-time applications filed at the U.S. Patent Office since 2001, we find that start-ups that win the patent “lottery” by drawing lenient examiners have, on average, 55% higher employment growth and 80% higher sales growth five years later. Patent winners also pursue more, and higher quality, follow-on innovation. Winning a first patent boosts a start-up’s subsequent growth and innovation by facilitating access to funding from VCs, banks, and public investors.
Keywords
Citation
Farre-Mensa, Joan, Deepak Hegde, and Alexander Ljungqvist. "What Is a Patent Worth? Evidence from the U.S. Patent 'Lottery'." NBER Working Paper Series, No. 23268, March 2017. (Previous version circulated under the title “The Bright Side of Patents”.)