p.7
Impact of SEC Filings on Patent Valuation
What role do financial statement disclosures play in the patent market?
They serve as an important information source facilitating patent sales.
p.7
Economic Importance of Patent Transactions
What is a key policy to foster innovation mentioned in the article?
Granting firms temporary monopoly rights to inventions through patent protection.
p.5
Information Asymmetry and Uncertainty in Patent Transactions
When is the effect of public firm presence on patent trading more pronounced?
With greater information asymmetry between buyers and sellers.
p.4
Economic Importance of Patent Transactions
How much did the new assets in the patent market increase to in 2019?
Approximately $6.7 billion.
p.2
Information Asymmetry and Uncertainty in Patent Transactions
Why is the relationship between public firm presence and future patent sales not necessarily causal?
Because other factors may jointly determine both public firm presence and patent sales.
p.5
Research Design and Methodology
What is the sample period for the study?
From 1994 to 2017, yielding 14,040 tech class-year observations.
p.4
Information Frictions in Patent Trading
What do intermediaries like ktMine do in the patent market?
They aggregate public firm financial filings and other information for valuing intellectual property.
p.7
Role of Public Firm Disclosures
What is the main focus of the study by Jinhwan Kim and Kristen Valentine?
The spillover effect of public firm disclosures on the patent trading market.
p.1
Role of Public Firm Disclosures
How can public firm disclosures assist in the patent market?
By providing useful commercial context for corporate innovations and facilitating trading.
p.1
Information Asymmetry and Uncertainty in Patent Transactions
What additional information is often required to evaluate the monetary potential of patents?
Additional information sources beyond the technical details published by the USPTO.
p.5
Information Asymmetry and Uncertainty in Patent Transactions
What is the Information Uncertainty Hypothesis?
Public firm presence increases trading of technologically related peers in the patent market when there is greater information uncertainty in the investment outcome.
p.5
Database of Patent Sales Analysis
What does the USPTO patent assignment data include?
Information on buyer and seller names, ownership structure, patent numbers, sale execution dates, and reasons for patent trade.
p.4
Role of Public Firm Disclosures
How can public firm disclosures help in the patent market?
They can mitigate information frictions and facilitate efficient trading and reallocation of patents.
p.4
Motivations for Patent Purchases
What is a potential economic gain from trading patents?
Generating more commercial value from innovations by trading to more experienced inventors.
p.1
Economic Importance of Patent Transactions
What is the potential benefit of a well-functioning patent market?
To generate significant economic gains by reallocating patents to more productive users through trade.
p.1
Motivations for Patent Purchases
What are some motivations for purchasing a patent?
To obtain valuable technologies, prevent competitors from developing related inventions, or defend against costly litigation.
p.2
Public Firm Presence and Patent Sales Correlation
What does the tech class-year unit of analysis help capture?
The impact of public firm disclosures on patent transactions among similar technological areas.
p.1
Information Asymmetry and Uncertainty in Patent Transactions
Why are public firm disclosures particularly valuable in the patent market?
They provide information often unavailable elsewhere or more readily available to resource-rich, privately informed traders.
p.2
Information Asymmetry and Uncertainty in Patent Transactions
What is a potential validity threat in the relationship between public firm presence and patent sales?
Omitted factors such as shocks to competition or patenting activity specific to a technology class.
p.6
Economic Importance of Patent Transactions
What is the average age of a patent sold after being granted?
4.7 years (56.52 months).
p.4
Information Frictions in Patent Trading
What challenges exist in the patent market?
It is decentralized and informationally opaque, making efficient trading difficult.
p.3
Role of Public Firm Disclosures
What was the purpose of the EDGAR implementation?
To move firms' SEC filings online, reducing information acquisition costs.
p.3
Economic Importance of Patent Transactions
What effect does public firm presence have on new buyers and sellers in the patent market?
A 9.7% increase in new buyers and a 10.1% increase in new sellers when moving from the 25th to the 75th percentile of public firm presence.
p.8
Research Design and Methodology
What is the regression model used to test the hypothesis regarding public firm presence and patent trading?
No. Patent Sales c,t+1 = b Public Firm Presence c,t + g X c,t + d c + L t + u c,t.
p.2
Role of Public Firm Disclosures
What type of information can public firms generate through SEC filings?
Technology-relevant information.
p.2
Information Frictions in Patent Trading
How do public firm disclosures benefit private firms?
They provide informational benefits related to supply, demand, and competitive conditions.
What is the key dependent variable in the study of patent sales?
No. Patent Sales, defined as the log of one plus the total number of patents sold in a tech class-year.
p.5
Role of Public Firm Disclosures
How can public firms contribute to the patent trading market?
By providing more disclosures and spurring information intermediation and acquisition activity.
p.1
Role of Public Firm Disclosures
What types of information can public firm disclosures provide for patent trading?
Pricing information on past patent sales, product-related disclosures, and contingency disclosures about patent litigation.
p.4
Patent Market Overview
When did the secondary patent market begin to materialize?
In the nineteenth century.
p.2
Database of Patent Sales Analysis
What does the Cooperative Patent Classification (CPC) system do?
Groups patents by similar technology and subject matter.
p.3
Information Asymmetry and Uncertainty in Patent Transactions
How does information asymmetry affect patent transactions?
The positive link between public firm presence and future patent sales is stronger where information asymmetry is greatest.
p.3
Economic Importance of Patent Transactions
What is the effect of generality scores on patent sales?
Technology classes with patents in the top quartile of generality scores have 11.1% additional patent sales.
p.7
Information Asymmetry and Uncertainty in Patent Transactions
What are the conditions under which the positive link between public firm presence and patent sales is stronger?
Where information asymmetry is greatest and where information uncertainty prevails.
p.5
Motivations for Patent Purchases
What is the Information Externalities Hypothesis?
Public firm presence increases trading in the patent market among technologically related peers.
p.4
Economic Importance of Patent Transactions
What was the estimated value of new patents available for sale each year historically?
Between $1.5 billion to $3.75 billion.
p.4
Information Asymmetry and Uncertainty in Patent Transactions
Why is intellectual property more difficult to value than tangible assets?
Because of its intrinsic nature and the uncertainty in forecasting expected payoffs.
p.3
Economic Importance of Patent Transactions
What is the significance of new buyers and sellers entering the patent market?
It ensures well-functioning markets, particularly in illiquid markets like the patent market.
p.7
Role of Public Firm Disclosures
How does an increase in public firm presence affect future patent sales?
A 9.4% increase in future patent sales is linked to going from the 25th to the 75th percentile in public firm presence.
p.2
Database of Patent Sales Analysis
What is the purpose of the novel database created for patent sales?
To observe the identity and ownership structure of entities involved in patent sales.
p.2
Economic Importance of Patent Transactions
What is the expected outcome of increased public firm presence in a technology area?
A 13.3% increase in future patent sales by other parties.
p.5
Impact of SEC Filings on Patent Valuation
What role do public firms' regulatory filings play in patent trading?
They help ameliorate information frictions driven by sellers with private information about patent value.
p.5
Research Design and Methodology
What data sources are used for the research design?
USPTO assignment data and PatentsView data.
p.4
Role of Public Firm Disclosures
What is the significance of SEC filings in the context of patent trading?
They contain valuable information that can improve the information environment for patent transactions.
p.3
Economic Importance of Patent Transactions
How do public firm disclosures contribute to the market for innovation?
They provide valuation-relevant information that facilitates the sale of patents and helps new market participants.
p.8
Economic Importance of Patent Transactions
What does the sale of patents as separate assets indicate about the patent market?
It makes up a much larger share of the patent market compared to M&A transactions.
p.8
Public Firm Presence and Patent Sales Correlation
What does the variable 'Public Firm Presence' represent in the analysis?
It represents the log of one plus the average ratio of total sales from public patenting firms to total sales of both private and public firms.
p.1
Economic Importance of Patent Transactions
What percentage of patents granted by the USPTO from 1994 to 2017 were sold at least once by 2020?
29% or 1.3 million patents.
p.1
Information Frictions in Patent Trading
What are the main challenges faced by the patent market?
Significant information frictions due to lack of a centralized exchange and difficulty in assessing the commercial value of innovations.
What types of patent ownership changes are excluded from the No. Patent Sales measure?
Employer assignments, administrative events, and security interests.
p.5
Information Asymmetry and Uncertainty in Patent Transactions
What is the Information Asymmetry Hypothesis?
Public firm presence increases trading in the patent market of technologically related peers when there is greater information asymmetry.
p.4
Economic Importance of Patent Transactions
What role does the patent market play?
It reallocates patents from developers to those who can efficiently commercialize the innovation.
p.5
Research Design and Methodology
What is the Cooperative Patent Classification (CPC) system?
A system that has 585 distinct patent technology classes used to define technology class in the study.
p.3
Impact of SEC Filings on Patent Valuation
How does public firm presence affect patent sales?
It increases the positive link between public firm presence and patent sales by 7.4% per quartile increase in pre-treatment public firm presence.
p.3
Impact of SEC Filings on Patent Valuation
What is the relationship between public firm presence and patent sales in technology classes with high outcome uncertainty?
There is a 10.0% increase in patent sales moving from the 25th to 75th percentile of public firm presence in these classes.
p.8
Public Firm Presence and Patent Sales Correlation
How is public firm presence measured in relation to patent market trading?
As the ratio of relevant public firms to total firms, with a focus on public patenting firms.
p.8
Economic Importance of Patent Transactions
What assumption is made regarding the potential influence of public firm presence on patent market trading?
It is greatest when the firm operates in the technological area of the patents being traded.
p.7
Economic Importance of Patent Transactions
What is often overlooked about patents according to the article?
That they are frequently traded between interested buyers and sellers.
p.2
Research Design and Methodology
What factors are controlled for in the analysis of patent sales?
Characteristics of patents, stock of patents available for sale, and tech class/year fixed effects.
p.4
Information Frictions in Patent Trading
What is a significant issue patent traders face?
Engaging in costly due diligence to identify available patents and obtain relevant valuation information.
p.4
Role of Public Firm Disclosures
What type of information can public firm disclosures provide during the patent transaction process?
Business and financial context, including pricing information and licensing agreements.
p.3
Role of Public Firm Disclosures
What role do SEC filings play in a firm's information environment?
They are crucial for understanding the firm's financial context and impact patent sales.
p.8
Information Frictions in Patent Trading
What is the significance of mapping firms to a patent technology class?
It allows for a more relevant analysis of the information environment surrounding patenting firms.
p.8
Information Asymmetry and Uncertainty in Patent Transactions
What characteristics differentiate patents that are sold at least once from those that are never sold?
Sold patents have greater private and scientific value, more transparency in disclosures, and more inventors.
p.8
Research Design and Methodology
How does the study ensure robustness in its results regarding public firm presence?
By excluding sales resulting from M&A activity and using various assumptions for industry-to-technology class mapping.
