Transcript Document

From Science Papers to Technology Patents to
Company Financial Performance
Presented by:
Francis Narin, President
CHI Research, Inc.
10 White Horse Pike, Haddon Heights, NJ, USA
Tel: 856.546.0600 Fax: 856.546.9633
E-mail: [email protected]
www.chiresearch.com
NAS Sackler Colloquium
Irvine Ca. 11-May-2003
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CHI Research is a Highly Specialized
Citation Research Consultancy
TRACES Study: Precursor to CHI
Science Indicators since 1970’s
Technology Indicators since 1980’s
Linkage Indicators since 1990’s
Published 140+ research papers
Featured in the New York Times, Business Week
MIT Tech. Review, and other media
Investor Tech-Line®
Financial Application of Technology Indicators
U.S. Patent No. 6,175,824
“Method and Apparatus for Choosing a Stock Portfolio, Based on
Patent Indicators”
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There are Three Kinds of Bibliometric
Analysis
Science
Technology
Papers citing Papers
Patents citing Patents
Linkage
Patents Citing Papers
&
Stock Performance
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Publication Frequency for Authors
(replotted from Lotka, 1926)
Logarithmic frequency diagram showing number of
authors mentioned once, twice, etc, in Auerbache’s
tables (points indicated by diamonds) and in
Chemical Abstracts, letters A and B (points indicated
by circles).
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Comparative Distribution of Logarithm of ‘Weighted’ Rate of
Publication replotted from Shockley, 1957)
Cumulative distribution of logarithm of ‘weighted’ rate of publication at Brookhaven National
Laboratory plotted on probability paper.
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Whole Patent Count Plots -- Semiconductors
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A Few Key Inventors Drive an Entire Lab.
Xerox Semiconductor Inventors 1981-87
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U.S. Naval Research Lab: Brainmap of
Teddy Keller & Associates
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Highly Cited Patents by Year for Company X
# Citations
40
All Inventors
30
20
10
0
75
76
77
78
79
80
# Citations
40
81
82
83
84
85
86
87
88
89
90
91
92
86
87
88
89
90
91
92
Without Key Inventor
30
20
10
0
75
76
77
78
79
80
81
82
83
84
Year
8
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85
Patenting in the U.S. is Representative of
International Technology
100,000
USA
U.S. Patents Granted 1998
Japan
10,000
Germany
Korea
Taiwan
Switzerland
1,000
New Zealand
100
UK
France
Canada
Netherlands
Sweden
Belgium
Australia
Finland
Austria
Denmark
Spain
Norway
Singapore
Italy
Ireland
Note: by Inventor Country
10
10
100
1,000
GDP 1996 US B$
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10,000
In the Realm of Technology, Japan Looms
Ever Larger
From the New York Times
Science Times Section -- Page C-1
Tuesday, May 28, 1991
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Patenting Changes with Economic Change
5000
Taiwan
4500
4000
UK
# Patents
3500
S Korea
3000
2500
2000
Italy
Sweden
Switzerland
Netherlands
1500
1000
500
0
1989
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1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
Growth in US Inventor Patenting
Information
& health
technologies
400
350
1990 = 100
300
Health Technologies
Information Technology
All other
250
200
150
Other technologies
100
90
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91
92
93
94
95
96
97
98
99
20
Patenting From the Pacific Region Overtakes
the Largest East Coast Regions
25,000
Number of patents
20,000
15,000
10,000
Pacific
Middle Atlantic
5,000
East North Central
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1986
1993
East North Central = Illinois, Indiana, Michigan, Ohio, Wisconsin
Middle Atlantic = New Jersey, New York, Pennsylvania
Pacific = California, Nevada, Oregon, Washington, Hawaii, Alaska
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2000
Information and Health Technologies Give
the Pacific Region Its Lead
Number of patents/1000
10
4
Information
Technology
8
Health Technology
Other Technologies
12
3
6
14
Pacific
10
Pacific
8
2
6
4
2
1
0
0
Pacific
4
2
86
93
00
0
86
93
00
East North Central = Illinois, Indiana, Michigan, Ohio, Wisconsin
Middle Atlantic = New Jersey, New York, Pennsylvania
Pacific = California, Nevada, Oregon, Washington, Hawaii, Alaska
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86
93
00
The Amount of Science Cited in U.S. Patents
Quadrupled between 1994 and 1998
120,000
100,000
Number of references on U.S. patents to the U.S. scientific
and technical literature
80,000
60,000
40,000
20,000
0
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
Source: Science & Engineering Indicators and CHI Research, Inc.
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U.S. Companies Preferentially Cite In-state
Public Sector Science in Their Patents
Citations from Industry Patents to Public Sector Papers
Alabama in-state: 39
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In-state citation ratios are on the
diagonal. In-state ratios exceed out
of state ratios in 23 out of 25 cases.
Actual / Expected 12
number of citations
10
8
6
AL
4
DC
IL
2
IN
TX
0
AL
Patenting companies' states
CT
VA
CO
FL
IN
NC
MA
patents
Expected # of citations = "patent state's" # of citations to all states multiplied by
"paper state's" share of cites received from all states
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CA
MD
CA
papers
Citation direction:
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Cited university (or
other public
institution) state
Highly Cited Papers are Much More Likely
to be Cited in Patents
Biomedical Research
Clinical Medicine
Science Citation Strata
Chemistry
Top 1%
2-10%
Physics
11-50%
Bottom
Engineering & Technology
Biology
0%
5%
10%
15%
20%
Share of 1993-95 US papers cited in 1997 US invented USPTO patents
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25%
Quality Technology is Valuable
Patent citation indicators can identify
technologically strong companies
which are undervalued by the market
A portfolio built of these undervalued companies will far
outperform any standard index.
The number of patents a company has is not significant in
the regression – it is the citation indicators that count.
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Background: 1999 Financial Analysts
Journal Paper by Deng, Lev and Narin
Median Market-to-Book Ratios of Chemical Companies
Classified by Patent Impact & Science Linkage in
the Previous 3 Years
3.000
Market-to-Book
2.627
2.466
2.500
2.099
2.173
2.000
1.500
Low
Impact
Low
Impact
Low
Science
High
Science
High
Impact
High
Impact
1.000
0.500
0.000
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Low
Science
High
Science
Companies Undervalued Based on Patent Scores are
More Likely to Experience Increased Market-to-Book.
Percent of Companies with Increased Market to Book
2 Years after Patent Evaluation
100
90
80
70
60
50
40
undervalued
30
overall
20
overvalued
10
0
1990
1991
1992
1993
1994
Year of Evaluation
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1995
1996
1997
Investor Tech-Line® Performance
2600
2100
ITL 20 Undervalued
NASDAQ
S&P500
ITL 20 Overvalued
1600
1100
600
100
Dec
90
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Dec
91
Dec
92
Dec
93
Dec
94
Dec
95
Dec
96
Dec
97
Dec
98
Dec
99
Dec
00
Dec
01
Dec
02
Observations
Research Productivity is highly concentrated
West Coast Overtaking East Coast
Public Science Impacts Locally
High Quality Science Impacts Technology
Quality Patent Portfolio Beats Market Averages
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