Technology portfolio, patent litigation probability and firm performance

This paper investigates if technology portfolio and patent litigation probability affect firms' short and long-term performances, which in past literature have mostly been associated with economic indicators or financial models. The patent data used in this paper are downloaded from the USPTO patent database and patent litigation probabilities are obtained from previous study. To measure firm performance, the Return on Asset (ROA) and the market value are calculated as the short-term and long-term performances, respectively. The correlation coefficient is then employed to approach the ROA and the market value to evaluate if technology portfolio and patent litigation probability correlates with the short-term and long-term performances of firms. The result of this paper sheds light for firms to make strategic decision based on their technology portfolio and to provide a novel way to identify firm performance.