How to create commercial value from patents: The role of patent management

This paper examines the relationship between patent management and multiple indicators of firm performance. The empirical analyses are based on a sample of 143 technology-based firms from the USA and Germany across multiple industries. The results show that two important dimensions of patent management, specifically patent protection management and patent information management, are positively correlated with a firm's licensing revenues, sales growth and profitability. This implies that not the number of patents a firm owns, but the firm's management of its patents determines the level of value creation from patents. We further find that a firm's technology strategy moderates the relationship between patent protection management and firm performance; it does, however, not moderate the relationship between patent information management and firm performance. Our findings have significant implications for improving firm performance by means of patent management.