The U-shaped relationship between patent age and patent value: evidence from assigned patents in China

We propose that opposite changes in the hazards of patent commercialization (HPC) and technology substitution (HTS) lead to a U-shaped relationship between patent age and patent value. Using a dataset of 2446 patents assigned to firms in Chinese universities from 2015-2020, our empirical results support this U-shaped relationship. Young patents with more claims are regarded as more valuable, owing to a lower HPC, and old patents with more International Patent Classification (IPC) classes are regarded as more valuable, owing to a lower HTS. Moreover, backward references had a moderate effect on the U-shaped relationship, and an increase in backward references caused the turning point to move to the right, flattening the U-shaped relationship. Interestingly, the turning point of the U-shaped relationship is around the age of 5.2 years, and the hazard of university patent invalidation in China is highest at this age.