Do Patents Matter for Commercialization?

Melbourne Institute Working Paper No. 08/09

Date: March 2009


Elizabeth Webster
Paul H. Jensen


In this paper, we take another look at the role that patents play in determining successful commercialization. We address this issue using survey data on 3,736 Australian inventions which were the subject of a patent application between 1986 and 2005. Although almost half of the survey respondents’ patent applications were not granted, many still attempted to commercialize their inventions. This variation in patenting and commercialization outcomes enables us to address the question: do patents matter for commercialization? Our results suggest that while the receipt of a patent grant had a positive and significant effect on most commercialization stages, the magnitude of the effect is quite modest. In fact, the marginal increase in the probability of attempting a commercialization stage due to the presence of a patent varies from 2.0 (export) to 8.0 (mass production stage) percentage points.

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