Patent Value and Citations : Creative Destruction or Strategic Disruption?

Patent citations often proxy for the value of innovation, and the very need for a proxy demonstrates the difficulty of getting direct measures. We value patents using novel data from non-practicing entities (NPEs) licensing revenues, the largest sample with direct measures analyzed to date. We find an inverted-U relationship between value and citations, with fewer citations at the high end of value than in the middle. We develop a model that offers a potential explanation: a mixture of productive patents produced by entrepreneurs to extend knowledge and strategic patents produced by incumbents to protect market share and discourage follow-on innovations