TY  - JOUR
AU  - Hall,Bronwyn H.
AU  - MacGarvie,Megan
TI  - The Private Value of Software Patents
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12195
PY  - 2006
Y2  - May 2006
UR  - http://www.nber.org/papers/w12195
L1  - http://www.nber.org/papers/w12195.pdf
N1  - Author contact info:
Bronwyn H. Hall
Dept. of Economics
549 Evans Hall
UC Berkeley
Berkeley, CA 94720-3880
Tel: 510/642-3878
Fax: 510/548-5561
E-Mail: bhhall@nber.org

Megan MacGarvie
Boston University
School of Management
595 Commonwealth Avenue, Room 522H
Boston, MA  02215
Tel: 617/353-9490
Fax: 617/353-6667
E-Mail: mmacgarv@bu.edu
M2  - featured in NBER digest on 2006-05-08
AB  - We investigate the value creation or destruction associated with the introduction of software patents in the United States in two ways. The first looks at the cumulative abnormal returns to Information and Communication Technology (ICT) firms around the time of important court decisions that impacted software patents, and the second analyzes the relationship between firms’ stock market value, the sector in which they operate, and their holdings of software patents. We conclude that the market evaluated software patents as a negative development ex ante. Ex post, a greater number of firms in all ICT sectors invested in these patents, and these firms had slightly higher market values than those with no software patents. However, while we obtain clear evidence that the technological importance or quality of patented innovation mattered for the market value of hardware firms both before and after the legal changes, it is less clear that the marginal patent right per se was associated with increases in market value, and there are no significant valuation effects associated with patents for pure software firms after the change.
ER  -