Science Quality and the Value of Inventions

Despite decades of research, the relationship between the quality of science and the value of inventions has remained unclear. We present the result of a large-scale matching exercise between 4.8 million patent families and 43 million publication records. We find a strong positive relationship between quality of scientific contributions referenced in patents and the value of the respective inventions. We rank patents by the quality of the science they are linked to. Strikingly, high-rank patents are twice as valuable as low-rank patents, which in turn are about as valuable as patents without direct science link. We show this core result for various science quality and patent value measures. The effect of science quality on patent value remains relevant even when science is linked indirectly through other patents. Our findings imply that what is considered "excellent" within the science sector also leads to outstanding outcomes in the technological or commercial realm.Comment: 44 page

A Dynamic Network Approach to Breakthrough Innovation

This paper outlines a framework for the study of innovation that treats discoveries as additions to evolving networks. As inventions enter they expand or limit the reach of the ideas they build on by influencing how successive discoveries use those ideas. The approach is grounded in novel measures of the extent to which an innovation amplifies or disrupts the status quo. Those measures index the effects inventions have on subsequent uses of prior discoveries. In so doing, they characterize a theoretically important but elusive feature of innovation. We validate our approach by showing it: (1) discriminates among innovations of similar impact in analyses of U.S. patents; (2) identifies discoveries that amplify and disrupt technology streams in select case studies; (3) implies disruptive patents decrease the use of their predecessors by 60% in difference-in-differences estimation; and, (4) yields novel findings in analyses of patenting at 110 U.S. universities.Comment: 37 pages, 3 figures, 5 table

Technological Innovation Performance Analysis Using Multilayer Networks: Evidence from the Printer Industry

Department of Management EngineeringThe importance of collaboration and technology boundary spanning has been emphasized in other inquiries into technological innovation. Therefore, this research project first tried to investigate the effect of collaboration on technology boundary spanning. Then, we investigated the effect of collaboration and technology boundary spanning on technological innovation within a firm by using a multilayer network to analyze patent data. The aim of this paper is to provide new insight into the process of analyzing patent data using multilayer networks. This empirical study is based on a sample of 408 firms within the printer industry from 1996 to 2005. Starting with a theoretical discussion of R&D collaboration, technology boundary spanning and innovation performance, the importance of a firm???s collaboration and technology boundary spanning in its technology innovation performance was empirically analyzed using patent data. We followed changes in collaboration networks, technology class networks and the connection between them and tried to find the meaning of those changes in firms??? technology innovation performances. We used degree centrality within the collaboration network and the ratio of collaborated patents to the total number of patents in order to measure a firm???s collaboration and formulated technology boundary spanning represented by exploitation and exploration by using edges of the multilayer network. As dependent variables, we used the number of patents and the average number of citations received over three, five, and 10 years to measure the firm???s quantitative and qualitative innovation performance respectively. The results of the analysis can be summarized as follows: a firm???s collaboration has positive effects on both exploitation and exploration. Firms with more collaborations show higher quantitative innovation performances while firms with more collaborations exhibit lower qualitative innovation performance. Exploitation has a positive impact on a firm???s quantitative innovation performance while exploration has negative effects on a firm???s quantitative innovation performance. The relationship between a firm???s exploration activities and a firm???s qualitative innovation performance manifests as an inverted U-shape. On the other hand, a firm???s exploitation activities have a U-shape relationship with the firm???s qualitative innovation performance. The implication of this study is that multilayer networks can be used to analyze patent data. This study used multilayer networks to formulate the exploitation and exploration only. However, in further research it can be utilized to find the hub firms that fuse technologies.clos

Harnessing and Sharing the Benefits of State Sponsored Research

In recent years data-sharing has been a recurring focus of struggle within the scientific research community as improvements in information technology and digital networks have expanded the ways that data can be produced, disseminated, and used. Information technology makes it easier to share data in publicly accessible archives that aggregate data from multiple sources. Such sharing and aggregation facilitate observations that would otherwise be impossible. But data disclosure poses a dilemma for scientists. Data have long been the stock in trade of working scientists, lending credibility to their claims while highlighting new questions that are worthy of future research funding. Some disclosure is necessary in order to claim these benefits, but data disclosure may also benefit one\u27s research competitors. Scientists who share their data promptly and freely may find themselves at a competitive disadvantage relative to free riders in the race to make future observations and thereby to earn further recognition and funding. The possibility of commercial gain further raises the competitive stakes. This article discusses data sharing in California\u27s stem cell initiative against the background of other data sharing efforts and in light of the competing interests that the California Institute for Regenerative Medicine (CIRM) is directed to balance. We begin by considering how IP law affects data-sharing. We then assess the strategic considerations that guide the IP and data policies and strategies of federal, state, and private research sponsors. With this background, we discuss four specific sets of issues that public sponsors of data-rich research, including CIRM, are likely to confront: (1) how to motivate researchers to contribute data; (2) who may have access to the data and on what conditions; (3) what data get deposited and when do they get deposited; and (4) how to establish database architecture and curate and maintain the database

Collective Invention during the British Industrial Revolution The Case of the Cornish Pumping Engine

In this paper, we argue that together with individual inventors and firms, what Robert C. Allen (1983) has termed as collective invention settings (that is settings in which rival firms freely release each other pertinent technical information), were also a crucial source of innovation in the industrial revolution period. Until now, this has been very little considered in the literature. This paper focuses on one of these cases: the Cornish mining district. In Cornwall, during the early nineteenth century, a notable collective invention setting, gradually emerged. This case is particularly remarkable because it was capable of generating a continuous and sustained flow of improvements in steam pumping technology which in the end greatly contributed to improve the thermodynamic efficiency of the steam engine. In this paper we study in detail the specific economic circumstances that led to the formation of this collective invention setting and we analyses its consequences for the rate of technological innovationCollective inventions, information sharing, case study

The Industry R&D Survey – Patent Database Link Project

This paper details the construction of a firm-year panel dataset combining the NBER Patent Dataset with the Industry R&D Survey conducted by the Census Bureau and National Science Foundation. The developed platform offers an unprecedented view of the R&D-to-patenting innovation process and a close analysis of the strengths and limitations of the Industry R&D Survey. The files are linked through a name-matching algorithm customized for uniting the firm names to which patents are assigned with the firm names in Census Bureau’s SSEL business registry. Through the Census Bureau’s file structure, this R&D platform can be linked to the operating performances of each firm’s establishments, further facilitating innovation-to-productivity studies.innovation, research and development, patents, scientists, technology

Does Excellence in Academic Research Attract Foreign R&D?.

We examine the role of host countries’ academic research strengths in global R&D location decisions by multinational firms. While we expect that a firm’s propensity to perform R&D in a host country increases with the strength of local academic research, firms are expected to be heterogeneously positioned to benefit from academic research strengths due to differences in the capacity to absorb and utilize scientific knowledge. We find support for these conjectures in an analysis of foreign R&D activities in 40 host countries and 30 technology fields by 176 leading European, US and Japanese firms during the periods 1995-1998 and 1999-2002. Controlling for a wide range of host country factors, the number of relevant ISI publications by scientists based in the host country has a substantial positive impact on the propensity to conduct foreign R&D. The effect of academic research is significantly larger for firms with a stronger science orientation in R&D - as indicated by citations to scientific literature in prior patents. For host countries with a strong relevant science base, this greater responsiveness of science oriented firms more than offsets a generally greater inclination to concentrate R&D at home. The findings appear robust across a variety of specifications.

Patent collateral, investor commitment, and the market for venture lending

This paper investigates the market for lending to technology startups (i.e., venture lending) and examines two mechanisms that may facilitate trade within it: (1) the ‘salability’ of patent collateral; and (2) the credible commitment of existing equity investors. We find that intensified trading in the secondary patent market is strongly related to the annual rate of startup lending, particularly for startups with more redeployable patent assets. Moreover, we show that the credibility of venture capitalist commitments to reinvest in their startups’ next round of financing can be critical for startup debt provision. Utilizing the crash of 2000 as a severe and unexpected capital supply shock for VCs, we show that lenders continue to finance startups with recently funded investors better able to credibly commit to refinance their portfolio companies, but withdraw from otherwise-promising projects that may have needed their funds the most. The findings are consistent with predictions of incomplete contracting and financial intermediation theory.Accepted manuscrip

Patent Clutter

Patent claims are supposed to clearly and succinctly describe the patented invention, and only the patented invention. This Article hypothesizes that a substantial amount of language in patent claims is in fact not about the core invention, which may contribute to well-documented problems with patent claims. I analyze the claims of 40,000 patents and applications, and document the proliferation of “clutter”—language in patent claims that is not about the invention. Although claims are supposed to be exclusively about the invention, clutter appears across industries and makes up approximately 25% of claim language. Patent clutter may contribute several major problems in patent law. Extensive clutter makes patent claims harder to search. Excessive language in patent claims may be the result of over-claiming—when patentees describe potential corollaries they do not possess—thereby making the patent so broad in scope as to be invalid. More generally, it strains the comprehensibility of patents and burdens the resources of patent examiners. After arguing that patent clutter may contribute to these various problems, this Article turns to reforms. Rejections based on prolix, lack of enablement, and lack of written description can be crafted to dispose of the worst offenders, and better algorithms and different litigation rules can allow the patent system to adapt (and even benefit from) the remaining uses of excess language. The Article additionally generates important theoretical insights. Claims are often thought of as entirely synonymous with the invention and all elements of the claim are thought to relate equally strongly to the invention. This Article suggests empirically that these assumptions do not hold in practice, and offers a framework for restructuring conceptions of the relationship between claims and the invention