| In the past strategists feared that rivals might outproduce, outmarket, or outsell them. Today they also worry about securing the patent rights to essential technologies. Since patents confer an exclusionary right to make, use, or sell proprietary technological knowledge, it is natural to reason that developing strong patent portfolios may reduce technological risks and enhance market endurance. This research performed an original firm level analysis of patent value, and an individual patent level analysis of patent maintenance within the U.S. pharmaceutical industry. The impact of patent quality, technology size, and innovation speed on patent renewal was tested. First, using firm level data, intellectual property was found to significantly contribute to superior firm performance as measured by new FDA approvals. Second, studying a sample of 5,643 patents and renewal decisions by 224 pharmaceutical firms, the number of citations received was established to influence patent maintenance decisions. In addition, patents that were never renewed had significantly fewer claims and a longer innovation cycle than other patents. |
