Most patents are worth little, and a few are worth a lot
A patent is usually a signal, deterrent or bargaining chip long before it is a lawsuit, so concentrate effort where value concentrates.
Lesson 7 of 8 · 3 min
Value is lopsided
Inventors often imagine a patent as a guaranteed asset. The evidence is less kind. It is also old, so read each study as an order of magnitude and note its year.
In 2001, Lemley wrote that "the overwhelming majority of patents are never litigated or even licensed" and that "at most only about two percent of all patents are ever litigated" (Rational Ignorance). Moore found that 53.71% of patents issued in 1991 expired early for non-payment (Worthless Patents).
At the other end, Scherer and Harhoff (2000) found the top 10% of sample members captured 48 to 93 percent of returns. Our research read that study at abstract level, and it includes non-patent data (Research Policy).
Industries differ
Patents matter far more in some fields than others. In a 1994 survey of 1,478 US manufacturing R&D labs, patents were "the least emphasized by firms in the majority of manufacturing industries," with secrecy and lead time emphasized most (Cohen, Nelson & Walsh). An older survey by Mansfield found 60% of pharmaceutical inventions would not have been developed without patents, against 0% in several industries (table).
Startups are a different population
For startups, a 2009 study found that preventing copying is the main reason to patent and that patents help secure investment. Cost and the ease of inventing around a patent are the main deterrents, and most software firms in the sample held none (Graham et al., 2009).
A 2020 study of 34,215 first-time startup applications found that winners had 55% higher employment growth and 80% higher sales growth five years later. Our research read that article at abstract level (Farre-Mensa et al.).
"Firms prefer secrecy" and "startups benefit from patents" do not conflict, because the two findings describe different populations (Cohen, Nelson & Walsh; Farre-Mensa et al.).
What this means for you
WIPO, the UN's intellectual property agency, lists the business uses of a patent: blocking others, market position and licensing (Inventing the Future). In our judgment, you should ask what a specific patent would do for your business before paying for it, and spend most on the few inventions most likely to matter.
Timeless wisdom
A patent's value comes from what it does for a business, not from the certificate. Most patents are never tested in court (Lemley), and their work is done as blocking power, market position and licensing leverage (WIPO). Returns concentrate in a small share of assets (Scherer and Harhoff). In our judgment, that pattern is the useful part. Whatever the exact numbers are this decade, treat each filing as a bet with a purpose, and do not treat a stack of patents as value in itself.
What's current
As of November 6, 2026
As of November 6, 2026, our research found no current replacement for these studies. That is a limit worth remembering. Each figure in this lesson is a dated measurement from a specific sample, and in our judgment behavior may have shifted since. Treat the numbers as orders of magnitude, not as today's statistics.
Key takeaways
- Most patents are never litigated or licensed, and a small share captures a large part of the returns.
- Patents matter far more in some industries than in others.
- Studies of established firms and of startups describe different populations.
- Decide what a patent will do for your business before you pay for it.
Check your understanding
Sources
- Lemley, Rational Ignorance at the Patent Office
- Moore, Worthless Patents
- Scherer and Harhoff, Research Policy (2000)
- Cohen, Nelson & Walsh, NBER Working Paper 7552
- Mansfield survey table (PMC)
- Graham et al., 24 Berkeley Tech. L.J. 1255 (2009)
- Farre-Mensa et al., Journal of Finance (2020)
- WIPO, Inventing the Future
The Academy is general education, not legal advice, and reading it doesn't create an attorney-client relationship. Patent law and fees change, so check the linked sources and have a registered patent attorney or agent review your situation before you file. Obsidyan sells patent software, including AI drafting tools, so weigh what these lessons say about AI tools with that in mind.