The Effect of Patent Acquisition on Subsequent Patenting Activity

Abstract

The importance of the patent market has increased in the high technology market due to open innovation and social efficiency. As most high-tech firms cannot rely on their own repository of technologies, they need to employ external technologies. These can be acquired through mergers and acquisitions (M&A) or from the patent markets, which is often referred to as open innovation. Because of insufficient comprehensive data and the complexity and contingency provision of the contract, there have been only a few empirical studies on patent transactions. This study seeks to understand the patenting activities of patent buyers after acquisition. By merging patent bibliographies and patent assignment information, the original dataset was prepared to investigate the patent acquisition activities of the patentees who were granted patents from 2007 to 2011 and their patent application activities from 2012 to 2016. The factors affecting patent production and acquisition and the relationship between patent acquisition and subsequent production were examined. The results show that the patent acquisition activity depends on the applicant type and technology field, and affects the future patent production of the applicant. Thus, observing a competitor's patent acquisition activities gives insights into the future direction of its technology development.