Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Working Knowledge
Business Research for Business Leaders
  • Browse All Articles
  • Popular Articles
  • Cold Call Podcast
  • Managing the Future of Work Podcast
  • About Us
  • Book
  • Leadership
  • Marketing
  • Finance
  • Management
  • Entrepreneurship
  • All Topics...
  • Topics
    • COVID-19
    • Entrepreneurship
    • Finance
    • Gender
    • Globalization
    • Leadership
    • Management
    • Negotiation
    • Social Enterprise
    • Strategy
  • Sections
    • Book
    • Podcasts
    • HBS Case
    • In Practice
    • Lessons from the Classroom
    • Op-Ed
    • Research & Ideas
    • Research Event
    • Sharpening Your Skills
    • What Do You Think?
    • Working Paper Summaries
  • Browse All
    The Bright Side of Patents
    20 Jan 2016Working Paper Summaries

    The Bright Side of Patents

    by Joan Farre-Mensa, Deepak Hegde and Alexander Ljungqvist
    We examine whether patents help startups grow and succeed using detailed micro data on all patent applications filed by startups at the U.S. Patent and Trademark Office since 2001 and approved or rejected before 2014. We find that patent approvals help startups create jobs, grow their sales, innovate, and reward their investors.
    LinkedIn
    Email

    Author Abstract

    Motivated by concerns that the patent system is hindering innovation, particularly for small inventors, this study investigates the bright side of patents. We examine whether patents help startups grow and succeed using detailed micro data on all patent applications filed by startups at the U.S. Patent and Trademark Office (USPTO) since 2001 and approved or rejected before 2014. We leverage the fact that patent applications are assigned quasi-randomly to USPTO examiners and instrument for the probability that an application is approved with individual examiners’ historical approval rates. We find that patent approvals help startups create jobs, grow their sales, innovate, and reward their investors. Exogenous delays in the patent examination process significantly reduce firm growth, job creation, and innovation, even when a firm’s patent application is eventually approved. Our results suggest that patents act as a catalyst that sets startups on a growth path by facilitating their access to capital. Proposals for patent reform should consider these benefits of patents alongside their alleged costs.

    Paper Information

    • Full Working Paper Text
    • Working Paper Publication Date: December 2015
    • HBS Working Paper Number: 16-071
    • Faculty Unit(s): Entrepreneurial Management
      Trending
        • 13 Aug 2021
        • Research & Ideas

        Managers, Here’s How to Bond with New Hires Remotely

        • 09 Dec 2019
        • Research & Ideas

        Identify Great Customers from Their First Purchase

        • 18 May 2022
        • Research & Ideas

        Are Banks the ‘Bad Guys’? Overdraft Fees Are Crushing Low-Income Customers

        • 13 May 2022
        • Research & Ideas

        Company Reviews on Glassdoor: Petty Complaints or Signs of Potential Misconduct?

        • 30 Nov 2021
        • Cold Call Podcast

        TikTok: Super App or Supernova?

    Find Related Articles
    • Patents
    • Business Startups
    • Entrepreneurship
    • Technology
    • Manufacturing
    • United States

    Sign up for our weekly newsletter

    Interested in improving your business? Learn about fresh research and ideas from Harvard Business School faculty.
    ǁ
    Campus Map
    Harvard Business School Working Knowledge
    Baker Library | Bloomberg Center
    Soldiers Field
    Boston, MA 02163
    Email: Editor-in-Chief
    →Map & Directions
    →More Contact Information
    • Make a Gift
    • Site Map
    • Jobs
    • Harvard University
    • Trademarks
    • Policies
    • Digital Accessibility
    Copyright © President & Fellows of Harvard College