Research On Patent Evaluating Approach Based On Delayed Option

Industrial construction upgrading and nation's competence enhancement are both relayed on the improvement of knowledge and technological development. And patent is used as the indicator of output of science and technology and the result of innovation. Also patent is looked as the indicator of technology's application in the market which affects the market through providing new products or reducing produce cost. Owing to its ability to prevent other competitors from entering a certain market, patent is always thought of as a kind of weapon to enclose the territory. In China, patent application and granted patent has been growing quickly and the inner construction of three kinds patent is highly upgraded. There are sufficient patent to form trade market and the foundation of patent management .However, the transaction and the inner management is greatly depended on the patent evaluation which can help relevant person know the patent's value by currency.Purpose of this article:The patent value only through being applied in the real world can be attained and under what condition to industrialize it is also play an important role on its value. So to make sure the investment threshold can not only be essential to the patent evaluation but to patent management. This article aims to combine the patent value to its optimal investment time so that the theory can be used to guide patent industrialization and undeveloped patent management. Owing to lack of the related evaluating method to play this role, the exist model are improved to fill up the gap.Main content:This article discusses the basic concepts and its connotation. Also analyzes the factors affect the patent value in the respective of law, technology and economy. And all the factors are simplified into investment cost, market value uncertain and competitiveness. And the utility of patents are classified into 2 groups which are value-creating and cost-reducing. For the former, the monopoly market structure is assumed, the latter, the duopoly market structure.After reviewing the present methods used to patent evaluation such as three traditional methods, mathematic economic method, financial option method and real option method, combining with the purpose of this article, the option-to-delay methodis thought to be a better method. And based on the exist model, some improvementsare provided attempting to make them more harmonious with patent's nature.What follows are that two groups of models are proposed according to the patentgroups and how the variables affects the patent in the models are analyzed andsimulated through Matlab software.To the value-creating patent in the monopoly market, the models to evaluate theindefinite patent with two different kinds of leaps are constructed based on the existmodel. And also the patent life-span is considered and transferred into a kind of leapsso that the model is suitable to get more accurate investment threshold and patentvalue.To the cost-reducing patent in duopoly market, market demand is assumed to followthe distribution of Geometric Brown move. The Cournot duopoly model equilibriummodel and Stackelberg equilibrium model are adopted and their different influence onthe investment threshold is also analyzed. In the end the leap factors and life span ofpatent are dealt by using a passion distribution to make the model more fit to reality.Innovations:1. Borrowing the optional investment model of real option, the improved models are proposed by complementing some variable to represent the hazard and upward-leap accident. And the original model assumed the project is indefinite, in this article the life-span of patent is looked as a kind of downward-leap so that the improved model can be used to evaluate patent with definite life-span. For the patent holders, they can get more accurate investment threshold for the individual patent.2. The idea of investment threshold is introduced to the cost-reducing patents which are assumed to stand in the duopoly market. And the market demand is assumed to be uncertain and follow the distribution of Geometric Brown move. Then different interactions between competitors are analyzed and whose effects on patent value are also analyzed. Hazards such as new technology appearing and consumer appetite changing suddenly are also added to the model through additional variable.3. Analyzing what kind of equilibrium can be reached in what kind of different strategies and which factors affect the chioce of strategy. Method and conclusion:Mathematic model and Matlab simulation are used. Based on the existing model and nature of patent, new variables are added and new assumption is given to the old variable so that improved models come into being. The results of simulation verify that the model can reflect reality logically.Owing to the limits of time and research field, the dissertation only test the model logically and by simulating without a real patent being as a evaluating object.