When a company applies for a patent, from time to time, an interesting phenomenon with disclosure time can happen. If there is a competing patent with an earlier date of application (prior-art patent), it may be disclosed after the first (focal) patent is published. Such prior patents may sufficiently limit the extent to which the focal patents claims can be exercised. In this paper, we make the first attempt to investigate how this phenomenon can influence stock price of the focal patent company. Our preliminary findings are that, for the large cap companies, the effect is not statistically significant. For the small cap companies, the results are contradictory and there are some findings in favor of significant negative effect. As a robustness check, we also consider biotech industry separately.
Read the full white paper, “Patents Disclosure Effects: Preliminary Results”, here.