de Rassenfosse, G., 2012. "How SMEs exploit their intellectual property assets: Evidence from survey data". Small Business Economics 39(2), 437-452.

Abstract
This paper seeks to understand how motives to patent affect the use of the patent portfolio with a particular focus on motives aimed at the monetization of intellectual property. The analysis relies on data from an international survey conducted by the European Patent Office. There are three main results. First, small- and medium-sized enterprises (SMEs) exhibit a much stronger reliance on 'monetary patents' than large companies and nearly half of the SMEs in the sample patent for monetary reasons. Second, SMEs tend to use their patents more actively than large firms. Third, smaller companies generally have a higher proportion of their portfolio that is licensed, but the licensing rate is significantly higher in the USA. An American SME is twice as likely as a European SME to have a high share of its portfolio that is actually licensed, witnessing a fragmented market for technology in Europe.

Keywords: financing constraint; intellectual property strategy; market for technology; motives to patent; multivariate ordered models; technology licensing
JEL classification: O32; O34; O38; G21; G24

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This article:

• Explains how patents can help to finance innovation (particularly in SMEs);
• Uses an original dataset based on an international survey carried out in 2006 by the European Patent Office;
• Presents descriptive statistics on the motives to patent;
• Introduces the term 'monetary patents' to refer to patents that are taken in view of convincing investors or generating licensing revenues;
• Studies how the motives to patent affect the use of the patent portfolio, with a particular focus on monetary motivations;
• Shows that the monetary (or exchange) motives are highly important to SMEs;
• Shows that SMEs have a higher proportion of their patent portfolio that is licensed and have a lower share of patents that are unused;
• Estimates that the licensing rate is significantly higher in the United States than in Europe: a U.S. company that is willing to license is twice as likely, as a European SME willing to license, to have a high share of its portfolio that is actually licensed. This suggests inefficiencies in the European market for technology;
• Concludes that the European market for technology needs to be further developed in order to ease transactions;
• Argues that it is particularly important that patent offices 'raise the bar' on patent quality in order to reinforce the credibility of the signal embedded in patents.

• Commercialization strategy and IPO underpricing
• Why do patents facilitate trade in technology? Testing the disclosure and appropriation effects
• Venture debt financing: Determinants of the lending decision
• Do firms face a trade-off between the quantity and the quality of their inventions?

• Patents as a financing mechanism for SMEs (mimeo)
• How SMEs exploit their intellectual property assets: Evidence from survey data, Melbourne Institute Working Paper 20/10