What do patent-based measures tell us about product commercialization? Evidence from the pharmaceutical industry

Patent-based measures are frequently used as indicators in empirical research on innovation and technology as well as on firms' strategies and organizational choices to characterize inventions or, more generally, innovative activities and the technological capabilities of organizations. A clear correlation between the value of an invention and a number of patent indicators such as the number of citations received has been established. However, there is much less evidence of what patent-based indicators tell us about outcomes beyond patent value. Using data from the pharmaceutical industry, we investigate the relationship between the most frequently used indicators and the outcomes from the product development process. Our findings draw a complex picture regarding the information content of various patent indicators that bear important implications for the use and the proper interpretation of these indicators in settings where they are employed to describe outcomes beyond the patent system itself.