Research Into The Decision-making On Corporate Patent Strategy Based On A Cost-revenue Analysis Of Patent Technology

With development and boost of knowledge-based economy in the new century, it has become a significant approach for modern corporations to form and strengthen the market competitive power through their creative intellectual achievements as well as the derived advantage which is protected by patent law in a monopolized way. Accordingly, it is quite an important work for those corporations possessing patents to research, in strategic perspective, how to make full use of their innovation resources to bring them more profit.The paper, seeing from a value angle, first employed a conceptual model to demonstrate and analyze the cost and revenue produced during the serial phases of patent technology's life circle, that is to say from R&D, patent application, product manufacture till the market expansion and decline. Furthermore, with mathematical and economics inference both quantitatively and qualitatively, it drew some primary factors determining the value of a patent, which can be categorized into three main influential aspects from legislation, technology and market. In addition, a questionnaire investigation with relevant analyses of the data collected from more than 70 patent-owned enterprises was also carried out, to verify the hypothetical structure of the affecting ingredients (of a patent's value) mentioned above.On the ground of foregoing research as well as introducing various existed methods of patent pricing, the study further designed two indicators—"Current Profit Rate" and "Value Growth Index" to appraise the patent's present as well as long-term capacity for earning respectively, which the specific approaches to calculating and measuring were also formulated. Moreover, to enhance the applicability of indicator "Value Growth Index", the author integrated opinions and judgments scored from 10 specialists who dealt with IP protection, exploitation, evaluation etc, and was in a position to gain the reference weights of 9 sub-indicators of "Value Growth Index" through AHP method.Further, by turning the indicators into two coordinate axis, the classification model (matrix) was established to make certain patent technology fallen into four categories based on their different profitability both at present and in future, namely the "Problem"(low current profit and long-term value), "Short-term" (high current profit with low long-term value),"Growing" (low current profit with high long-term value) or "Quality" (high current profit and long-term value) patent. Besides, inherent causes accounted for the discrepancies in value among the four type patent technologies were also analyzed in detail, aiming at helping the corporation have a much clearer picture of their classified patents to adopt effective strategy.Last but not the least, with research into the various effects on the cost and revenue of certain patents differed among 10 strategies, the paper advanced some recommendations in support of corporate decision-making on patent strategy, which were closely pointed to its actual value and some other factors should be considered such as business venture, management competence, strategy portfolio etc. Finally, a train of thought for selecting a patent strategy was summarized and also demonstrated by a flow chart based on the above cost-revenue research as well as established classification model.