Patent Value Indicators and Technological Innovation

I provide empirical evidence that quality-adjusted patents can identify technological innovation in small and medium-sized enterprises. Survey data on commercialization of patents is related to patent quality indicators (patent renewal, patent family size and forward citations) from archival sources. Among the patent quality indicators, both the length of patent renewal and the size of the patent family indicate that a patent has been commercialized. Patent renewal for at least 6 years is sufficient to predict an accurate probability of commercialization. Furthermore, patent renewal is the only indicator revealing whether commercialization is successful or not. Forward citations have a weak relationship with both commercialization and successful innovation, which may reflect the fact that citations are outside the control of the patentees. Although the correlations of the patent value indicators with technological innovation are noisy, this study provides stronger empirical support for the true relative value of different indicators with respect to innovation