Improving citation-based patent value measures

A growing literature aims at determining the private value of patents. It has been shown that patents and the citations they receive by future patent applications contribute significantly to the private value of firms beyond their R&D stocks. But it has also been shown that citations can explain very little of the variance of the patent value distribution. This paper suggests that citation-based patent value measures can be improved by taking the reason for which patents are cited into account. Such information is available at the European Patent Office.