Private Value of European Patents

I examine the joint patent designation-renewal behavior of the EPO patent applicants during 1978 to 1996, using both nonparametric technique and a parametric model. The European patents through the EPO are substantially more valuable than patents through the national route. Value distributions of the patents are highly skewed, and even more so for the value distributions of the EPO patent families. The value of patent rights increases with the economics size of the country and has a modestly increasing returns to scale. Model estimation also reveals significant institutional differences across different EPO member countries in patent protections and quantifies them.