What Is a Patent Worth? Evidence from the U.S. Patent 'Lottery'

What Is a Patent Worth? Evidence from the U.S. Patent 'Lottery'

Journal article

74 pages

We provide evidence on the value of patents to startups by leveraging the quasi-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 startups 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 startup’s subsequent growth and innovation by facilitating access to funding from VCs, banks, and public investors.

Published in : Journal of Finance

[Pulaski, New York] : American Finance Association 2019.

eng