Patent Characteristics and Patent Ownership Change in Agricultural Biotechnology

Abstract

We examine the effect of various patent characteristics on changes in patent ownership that occurred due to mergers, acquisitions, and spin-offs in the agricultural biotechnology industry in the 1980s and 1990s. Our goal is to shed light on the role certain patent qualities may play in the transfer of knowledge and technology that takes place through merger and acquisition activity. Specifically, we empirically measure the effect of patent value, scope/breadth, strength, and the nationality of the patent owner on the occurrence and frequency of patent ownership change in the agricultural biotechnology sector during the 1980s and 1990s. We find that the greater the patent breadth and the less valuable and “weaker” the patent, the greater the likelihood and frequency of patent ownership change. Also, the nature of patent ownership affects patent ownership change, with patents owned by multiple owners of different nationalities most likely to change hands.