Exploring legal patent citations for patent valuation

Effective patent valuation is important for patent holders. Forward patent citations, widely used in assessing patent value, have been considered as reflecting knowledge flows, just like paper citations. However, patent citations also carry legal implication, which is important for patent valuation. We argue that patent citations can either be technological citations that indicate knowledge transfer or be legal citations that delimit the legal scope of citing patents. In this paper, we first develop citation-network based methods to infer patent quality measures at either the legal or technological dimension. Then we propose a probabilistic mixture approach to incorporate both the legal and technological dimensions in patent citations, and an iterative learning process that integrates a temporal decay function on legal citations, a probabilistic citation network based algorithm and a prediction model for patent valuation. We learn all the parameters together and use them for patent valuation. We demonstrate the effectiveness of our approach by using patent maintenance status as an indicator of patent value and discuss the insights we learned from this study.