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Source: Monika Schnitzer and Martin Watzinger, “Standing on the shoulders of science,” Centre for Economic Policy Research Discussion Paper 13766, May 2019.
Commentary: Patents are a key measure of innovation, but there is wide variation in the market value of a given innovation. A new study identifies one source of that variation by examining the relationship between whether a patent cited scientific articles in its application and the patent’s subsequent value. Using a database of 1.2 million patents filed between 1980 and 2010, it finds that patents that cited scientific articles were worth an average of $39.8 million, which was 50 percent more than the average of $26.4 million for patents that did not. However, scientific patents are significantly riskier. They are more likely to rank among the most valuable patents, but also more likely to be among the least valuable.