Ex-ante

Macroeconomics

Premise

Linguistics

Philosophy

Market size

Actuarial science

Statistics

Commerce

Weighting

Economics

Data mining

Market value

Computer science

Radiology

Mathematics

Value (mathematics)

Econometrics

Valuation (finance)

Measure (data warehouse)

Medicine

Finance

Composition (language)

Applied Economics

Recent research has proposed a method of patent valuation based on weighting patent family size by the market size of the countries in the family. The premise is that inventors tend to seek greater international coverage for their more valuable patents. The paper presents a novel way to test the ability of market size-weighted patent families to predict patent value and compares the method against extant measures of patent valuation based on patent citations and renewal behaviour. We use forecasting techniques to show that the weighted patent family size measure outperforms other methods in terms of predicting patent life and the number of citations. An advantage of the weighted patent family size measure is that it is based on ex-ante information and is easy to construct for purposes of evaluating patent value. We demonstrate this advantage using a large, comprehensive database of international patent families.

Can patent family size and composition signal patent value?