Patent citations: Data and methodsdimetic.dime-eu.org/dimetic_files/SWagnerdimetic.pdfAgenda 1 What...

Patent citations: Data and methods

Stefan Wagner

Ludwig-Maximilians-University MunichInstitute for Innovation Research INNO-tec

DIMETIC, March 2007

Stefan Wagner (University of Munich) Patent citations DIMETIC 2007 1 / 49

Agenda

1 What is a Patent? – A primer

2 Patent examination and the source of patent references

3 Patent references vs. patent citations – logic and applications

4 Patent data, sources, descriptive statistics, applicationsInformation on a patent documentA closer look at the European data – aggregate levelA closer look at the European data – Technological area level

5 Summary and outlook to next session


What is a Patent?A document ...


What is a Patent?Patents are exclusionary rights

Patents are ...

a set of exclusionary rights,

granted by a state to a patentee (inventor or assignee),

for a fixed period of time (in general 20 years),

in exchange for the disclosure of the details of the invention to thepublic.

Patents are granted on devices, methods, processes or compositionsof matter (substance) (⇒inventions), which are...

new (invention must not be known before the application for thepatent)

inventive (invention must involve an inventive step and must not beobvious)

useful or industrially applicable (hard to define but easy to satisfy...)


What is a Patent?Patents are legal institutions influencing economic outcomes

A patent is a trade-off between

1 welfare decreases and

I state grants an exclusionary right to the patent holder, which might inthe most extreme case constitute a temporary monopoly

I ⇒ increased prices compared to competitionI strategic behavior of patentees (patent thickets, patent trolls,

business method patents....) leading to increased barrier to entry orlower competition

2 welfare increasesI disclosure of the details of an invention otherwise kept secretI increases in the incentives to innovate since appropriation is easierI creating market for intellectual property (patents can be traded or

licensed)I signal to investors (might be of particular relevance for start-ups in

the financing stage)


What is a Patent?Patents are territorial/ national rights

Patents are ...

territorial rights

protecting the inventor only within the territory of the granting state

not supra-national rights

International protection can be obtained by

getting many national patent rights for one underlying invention(equivalents)

different paths to obtain many different national patent rightsI individual applications at many national patent officesI using harmonized application paths leading to many national patents

(European Patent Office (EPO), PCT at World Intellectual PropertyOrganization (WIPO))


What is a Patent?Harmonization Efforts

The European Patent Office

Founded in 1978

Provides a centralized application path for applicants seeking patentprotection in several European states

After the grant of an EP-patent a bundle of national patent rights isissued

The World Intellectual Property Organization WIPO

Patent applications under the Patent Cooperation Treaty (PCT) canbe filed directly at WIPO (WO-Patents)

PCT-applications provide the application with the option for futureapplications to patent offices worldwide

WIPO does not conduct searches for prior art or examinations butprovides a binding legal framework for searches and examinationconducted by national offices


What is a Patent?International protection and the priority System

International applications and the priority system

Patents can only be granted on novel inventions ⇒ what has beenalready patented (does not matter where) can not be considered asnovel

Problem for applicant: in principle only immediate application at allrelevant international offices possible

Priority System established with the Paris Convention for theProtection of Intellectual Property Rights (1883) allowsapplicants to file patent applications at different patent offices within12 months after the original (priority) application

Priority data

If there are several international patent applications for one invention, theyall carry the same unique priority date (date of first filing at a patentoffice).


Agenda







Patent examination and patent referencesFrom an invention to a patent

Typical process of a patent application - simple case of nationalfiling

1 Invention

2 Filing of the patent application (fill out a form)I Description of the inventionI Drawings of the invention if necessaryI Claims of what exactly should be protectedI References to previous related inventions (prior art)

3 Examination by a patent officeI Criteria of patentability are examinedI Applicant has to pay examination fees

4 Decision of the patent office on the application


Patent examination and patent referencesThe examination process at the European Patent Office (EPO)


Patent examination and patent referencesThe search report as origin of patent references

Novelty and non-obviousness of an invention to be patented arejudged based on prior art

prior art can be included to delineate the invention and itsapplications from previous inventions (good case)

prior art can be included to show lack of novelty or obviousness ofthe invention to be patented

Search report

Search report is compiled before the material examination of a patentapplication and contains all references to existing prior art relevant for theexamination.


Patent examination and patent referencesExcerpt from the search report of EP99205737


Patent examination and patent referencesThe role of prior art for the examination of applications

Prior art can be contained in different types of documents

1 Previous patents: patent offices search in databases containingalmost all global patent applications

2 Non-patent literature: mostly scientific literature which is alsosearchable via databases

Prior art is referenced in the patent application by

1 the applicantI most patent systems contain rules obliging the applicant to include

references to relevant prior artI rules very different in different patent systems (in particular, big

difference between USPTO and EPO)

2 the patent officeI the first step of patent examination is the compilation of a search

report containing prior art


Patent examination and patent referencesDifferences between United States Patent and Trademark Office (USPTO) andEuropean Patent Office (EPO)

The governing patent laws in the US and in Europe are verydifferent with regard to patent references

the US systemI puts much more emphasis on the applicant ⇒ applicant is responsible

for citing any document that might be of relevance for patentexamination and can be held responsible for failures

I incentive to reference ”too much”

the European systemI patent examiner at the EPO is the only responsible source for the

inclusion of relevant referencesI ’all relevant information with a minimum of references’-approach

Different incentives to include references

US patents include a higher number of references compared to EPOpatents – keep in mind when interpreting data.


Patent examination and patent referencesA first glance at the data

Average number of references per application (1990-1999)

Office EPO DE-PO GB-PO USPTO

References toPatents 4.37 3.98 3.87 12.96Non-Patent literature 0.85 0.47 0.23 2.98

Table: See Michel and Bettels, 2001


Agenda







Patent references – backward lookingPatent references are directing to older patents or non-patent literature

Today

Non-Patent Literature


Patent

Patent

Patent

Patent underConsideration

Past t


Patent citations – forward lookingPatent citations stem from younger patents citing the patent under consideration

Today


Patent

Patent

Future t


Applications – Measures on the patent level

Today


Patent

PatentNon-Patent Literature


Patent

Patent

Patent

Past Future t


Applications – Measures on the patent levelPatent references and the similarity to scientific references

Most important measures on the patent level

1 Backward looking measures of patent referencesI Count of references contained in a patentI Distribution of references across technological areas →

Originality of a paper ↔ referencing to more diverse previous papersI Time structure of references ↔ is paper referring to relatively young

or to older patents?

2 Forward looking measures of patent citationsI Count of citations received → more important papers tend to be

more cited than less important papers → Value!?!I Time structure of citations ↔ is patent cited for a long period of time

or just for a couple of years?I Generality of a patent ↔ citations only by papers from a certain field

or is it cited by patents from many different fields?


Applications – Measures on the inventor/ firm-levelAggregation on the inventor/ firm-level

Patent Portfolios

Patents

Inventor / Firm A Inventor / Firm B

Patent

PatentPatent Patent

PatentPatentPatent

Patent

Patent

Patent

Patent

Patent

Patent


Applications – Measures on the inventor/ firm-levelPatent references and the similarity to scientific references

Most important measures on the patent level

1 Backward looking analysis of patent referencesI Similarity of patent portfolios of two firms/ inventorsI Complexity of technologies developed by firms/ inventors ↔

technological scope of referenced patents

2 Forward looking analysis of patent citationsI Count of citations received → Value/ relevance of patent portfoliosI What kind of citations received? → Blocking nature of patent

portfolios

Not treated here

Further levels of aggregation possible and in combination highlyinformative


Applications in the literatureReference/ Citation-based measures have been applied broadly in the economic andmanagement literature

Some important fields of research, where patent citation data hasbeen used

1 Applicability of patent citations to measure knowledge flows

2 Geographic localization of knowledge spill-overs/ knowledge diffusion

3 Determinants of knowledge spill-overs/ knowledge diffusion

4 Patent value/ firm value

5 Duration of patent examination

6 Probability of opposition/ infringement suits

Outlook

Topic (1) and (3) will be treated in depth in the second lecture tomorrow.


Agenda







Information contained in a patent document IA patent contains a variety of different information

Information relating to the applicant

Identity (Name and address)

... can be used to construct patent portfolio of an applicant

Be aware of name-matching problems → Typos when name isentered by patent office, firms file patents via different subsidiaries,M&A-activity, new firm names ...

Information relating to the inventor

Identity (Name and address)

... if combined with applicant information can be used to identify tojob history and mobility of inventors

Be aware that common names (eg ’Hans Muller’, ’John Smith’ ....)can create headaches for the analyst


Information contained in a patent document IExample – Patent EP1000000


Information contained in a patent document IIA patent contains a variety of different information

Information relating to the invention

Title

Abstract and Description of the invention

Claims describing the exact scope of protection awarded to theinventor

Technological classification provided by the patent office according tothe IPC-classification system

I IPC classification system is provided by the WIPOI Hierarchical system providing technology-based classification system for

patents (thousands of subcategories...)I Patents are classified during the examination by the patent examinerI OECD provides aggregation scheme mapping IPC-classes to 30

technical fields (see OECD Patent Manual 1994)


Information contained in a patent document IIExample – Patent EP1000000


Information contained in a patent document IIIClassification of references

Information relating to prior art

Publication numbers of referenced patentsFull references of non-patent literature (Author, Title, Journal,...)In case of European patents: Classification of references indifferent categories


Classification of references in the search reportType Description

X Particularly relevant documents when taken alone (a claimedinvention cannot be considered novel or cannot be consideredto involve an inventive step)

Y Particularly relevant if combined with another document of thesame category

A Documents defining the general state of the artO Documents referring to non-written disclosureP Intermediate documents (documents published between the

date of filing and the priority date)T Documents relating to theory or principle underlying the in-

ventionE Potentially conflicting patent documents, published on or after

the filing date of the underlying inventionD Document already cited in the applicationL Document cited for other reasons (e.g., a document which may

throw doubt on a priority claim)Stefan Wagner (University of Munich) Patent citations DIMETIC 2007 31 / 49

Information contained in a patent document IVA patent contains a variety of different information

Information relating to the examination procedure

Date of application

Existence of priority filing

Dates of following procedural steps (publication, request ofexamination, date of final decision on patent application)

Information not contained in the patent document

The patent document does not include further procedural events likeopposition at the EPO or litigation in courts


Where to get the information – Data SourcesPatent data is provided via different sources

1 Patent officesI Most patent offices provide online patent inspection of (single) patents

via their websitesI www.uspto.gov, www.epoline.orgI Some patent offices offer databases containing all existing patent

applications on DVD-Rom basis (→ PATSTAT)

2 Commercial vendorsI A variety of commercial vendors offer (more or less) comprehensive

patent databases providing access to a large amount of patentsI Industry leader is Thompson via www.thompsonderwent.comI Commercial solutions to access online-databases of patent offices

3 Non-commercial/ Academic institutionsI NBER US patent citations data file currently contains USPTO patents

from 1963-1999I update until 2002 availableI For European data: EP-CESPRI data (Univ. Bocconi)


Where to get the information – PATSTATWhen available PATSTAT will be the most comprehensive database on the market

PATSTAT

officially called the ”EPO worldwide patent statistical database”

will be made available in a couple of months for research purposes byEPO/ OECD

includes data on 56 million applications filed at more than 65 patentoffices

contains a consolidated set of priorities with a harmonized numberingsystem → identification of equivalents

hard-to-handle format: comes in several (very) large tables based on aSQL-database

Following descriptive statistics are based on provisional PATSTAT copyprovided to INNO-tec as of September 2006


A closer look at the European patent dataApplication figures at the European Patent Office – more than 150.000 applicationsin 2006


A closer look at the European patent dataWhich areas grow fastest – based on the OECD technology classification

Rank Technical Area Annual Applications1990 2000 Total Growth

1 Telecommunications 3,273 11,554 253%2 Pharmaceuticals, Cosmetics 1,896 6,080 221%3 Information technology 2,754 7,540 174%4 Biotechnology 1,193 3,176 166%5 Medical Engineering 2,298 5,708 148%6 Engines, Pumps, Turbines 1,369 3,245 137%7 Transport 2,269 5,037 122%8 Electrical devices, - Engineering 3,818 7,296 91%9 Consumer Goods and Equipment 2,370 4,414 86%10 Analysis, Measurement Control 4,412 7,712 75%11 Semiconductors 1,523 2,524 66%12 Mechanical Elements 2,123 3,509 65%13 Thermal Processes and Apparatus 809 1,334 65%14 Civil Engineering, Building, Mining 1,918 3,111 62%15 Surfaces, Coating 1,089 1,759 61%16 Environment, Pollution 492 791 61%17 Machine Tools 1,642 2,533 54%18 Handling, Printing 3,205 4,942 54%19 Audiovisual technology 2,413 3,666 52%20 Agriculture, Food 639 963 51%21 Agricultural - and Food Machinery 711 1,055 48%22 General technological Engneering 2,172 3,142 45%23 Optics 2,742 3,863 41%24 Chemical - , Petrol - and Basic Chemistry 1,757 2,301 31%25 Materials, Metallurgy 1,580 2,040 29%26 Macromolecular Chemistry, Polymers 2,927 3,544 21%27 Material Processing 2,913 3,518 21%28 Organic Fine Chemistry 4,158 5,005 20%29 SpaceTechnology, Weapons 330 393 19%30 Nuclear Engineering 302 293 -3%

Total 61,100 112,049 78%Stefan Wagner (University of Munich) Patent citations DIMETIC 2007 36 / 49

Computation of referencesSome conceptual issues

PATSTAT allows for correction of referenced equivalents – possibilityof including more information on patents

Figure: Harhoff/ Hoisl/ Webb (2007)


How much is referenced?Average number of references on a patent application – uncorrected

Figure: Harhoff (2004)


What is referenced?Office of first filing of referenced patent application – corrected



What is referenced?Office of first filing of referenced patent application



How are the references classified?Average share of different classes of references



Technological area levelCase example: Electronics



Patenting in Electronics characterized by

Steep increase in patent applications (patent explosion)

Highly concentrated ownership of patent holdings

Below average opposition and litigatious activity

Average share of type-X references

Implications

Is this area prone to anti-competitive behavior like collusion? Or are theobserved patterns just reflecting the industry structure?


Agenda







Summary and Outlook

Summary

Distinguish between references and citations!

Patent references are a good starting point for the computation ofcitation measures on the patent and on the firm level

Data is mostly freely available

European data has several advantages over US data

Be aware of equivalents problem

Outlook

Use of citation based measures within the analysis of knowledge spill-over→ tomorrow!


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