(2026). Value Estimates for U.S. Patent GrantsMax Planck Institute for Innovation & Competition Research Paper No. 26-08.
We propose major amendments to the standard approach for retrieving valuations for U.S. patents from stock market data put forth by Kogan et al. (2017). For most firms, especially since the 1980s, grant events involve multiple, simultaneously issued patents. We argue that the number of simultaneously issued patents affects the signal-to-noise ratio used for filtering patent value estimates out of stock returns. We also propose a method for allocating the firm's capital gain from a week's multiple patent grants to individual patents. We show that our revised values exhibit much higher correlations with external value measurements.
