Benchmarking U.S. University Patent Value and Commercialization Efforts: A New Approach

71 Pages Posted: 1 Nov 2018 Last revised: 9 Jun 2019

See all articles by David H. Hsu

David H. Hsu

University of Pennsylvania - Management Department

Po-Hsuan Hsu

National Tsing Hua University - Department of Quantitative Finance

Tong Zhou

ShanghaiTech University

Arvids A. Ziedonis

KU Leuven - Faculty of Economics and Business; Department of Management, Strategy, and Innovation

Date Written: June 7, 2019

Abstract

Despite the significance of patented university research, it is difficult to measure the economic value of their patented inventions and observe the extent to which universities are able to capture such value through patent licensing. Moving beyond assessing commercialization performance by simple statistics, we propose a new approach to benchmarking university patents and commercialization performance based on comparative corporate patent value. Our procedure involves matching university patents to patents granted to public corporations with similar patent characteristics to estimate the “potential value” of these university patents by the stock market reactions to matched corporate patent grants. We then calibrate an empirical patent valuation model for these estimated values of university patents by employing technology-level licensing data from a leading US research university. In aggregate, we compare the estimated potential values of a university’s patent portfolio to its annual licensing income, and find that universities realize on average 5-9% of the estimated potential value through licensing income. Finally, we investigate the correlates of university-level potential patent value and suggest avenues for future research.

Keywords: University Patents; Patent Value; Patent Licensing

JEL Classification: G12; L30; O30

Suggested Citation

Hsu, David H. and Hsu, Po-Hsuan and Zhou, Tong and Ziedonis, Arvids Alexander, Benchmarking U.S. University Patent Value and Commercialization Efforts: A New Approach (June 7, 2019). Available at SSRN: https://ssrn.com/abstract=3264090 or http://dx.doi.org/10.2139/ssrn.3264090

David H. Hsu

University of Pennsylvania - Management Department ( email )

The Wharton School
Philadelphia, PA 19104-6370
United States
215-746-0125 (Phone)
215-898-0401 (Fax)

Po-Hsuan Hsu (Contact Author)

National Tsing Hua University - Department of Quantitative Finance ( email )

101, Section 2, Kuang-Fu Road
Hsinchu, Taiwan 300
China

Tong Zhou

ShanghaiTech University ( email )

393 Middle Huaxia Road, Pudong
Shanghai, Shanghai 201210
China

Arvids Alexander Ziedonis

KU Leuven - Faculty of Economics and Business; Department of Management, Strategy, and Innovation ( email )

Warmoesberg 26
Brussels, 1000
Belgium

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