Individual inventors and market potentials: Evidence from US patents

This paper examines the propensity for patents by individual inventors to be commercialized. By exploiting a peculiarity of the US patent system, concerning the different patent renewal fees paid in order to obtain small or large entity status, we are able to distinguish patents that become part of a large corporation's patent portfolio. Using an extensive dataset of US patents, for both domestic and foreign individual inventors, we find that patent characteristics, size of research teams, prior patenting experience and past corporate patenting activity are positively associated with an increased likelihood of transferring patent rights to large corporations.