NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

How Redeployable are Patent Assets? Evidence from Failed Startups

Carlos J. Serrano, Rosemarie Ziedonis

NBER Working Paper No. 24526
Issued in April 2018
NBER Program(s):Corporate Finance Program, Industrial Organization Program, Productivity, Innovation, and Entrepreneurship Program

Entrepreneurial firms are important sources of patented inventions. Yet little is known about what happens to patents “released” to the market when startups fail. This study provides a first look at the frequency and speed with which patents originating from failed startups are redeployed to new owners, and whether the value of patents is tied to the original venture and team. The evidence is based on 1,766 U.S. patents issued to 285 venture capital-backed startups that disband between 1988 and 2008 in three innovation-intensive sectors: medical devices, semiconductors, and software. At odds with the view that the resale market for patented inventions is illiquid, we find that most patents from these startups are sold, are sold quickly, and remain “alive” through renewal fee payment long after the startups are shuttered. The patents tend to be purchased by other operating companies in the same sector and retain value beyond the original venture and team. We do find, however, that the patents and people sometimes move jointly to a new organization following the dissolution of the original venture, and explore the conditions under which such co-movement is more likely. The study provides new evidence on a phenomenon—of active markets for buying and selling patents—underexplored in the literature and consequential for both entrepreneurial and established firms.

download in pdf format
   (442 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w24526

Published: Carlos Javier Serrano & Rosemarie Ziedonis, 2019. "How Redeployable are Patent Assets? Evidence from Failed Startups," Academy of Management Proceedings, vol 2019(1).

 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us