State of Innovation

Patents and Innovation Economics

What is the Value of an Issued Patent?

Jacob Schmookler, who conducted the most extensive econometric study of patents, estimated the mean value of a patent as $80,000.00 in 1966.[1]  Adjusting for inflation this would place the mean value of an issued patent at $506,000.00.  This estimate seems reasonable based on other data points.  For instance, Intel’s venture capital arm around 2000 would increase the valuation of any start-up they invested in by $1 million for each issued patent.  Of course, not all patents are created equal and the very illiquid market for patents means that the value of any particular patent will vary significantly.  If there were a strong secondary market for patents, we would not only have a better understanding of the value of an issued patent but also less variation.  For more on how to create a strong secondary market for patents see Jump Starting a Secondary Market for Patents. (

[1] Schmookler, Jacob, Invention and Economic Growth, Harvard University Press, Cambridge Massachusetts, p. 55, 1966.

December 16, 2009 Posted by dbhalling | -How to, Patents | , , , | 3 Comments