Paper Title
Patents as Real Options for Mitigating Innovation Uncertainties

Abstract
From the aspect of real option, patents provide companies with future flexibility of making decision in response to uncertainties. Through the case of CueCat, the values provided by patents as real options for start-up companies are discussed in this study. Confronting uncertainties in connection with innovation, a start-up company may be difficult to survive once its product fails in the market. However, failure of product in the market should not be construed as that there is no demand for its underlying technology. While products fail in the market, the start-up company possesses exclusive right from patents may re-commercialize the technology or engage in patent transactions. In addition, although R&D outputs are limited, patent filing strategy can help the start-up company to develop its patent portfolio and thereby to increase the value of underlying asset of the patents as real options. Keywords - Real Option, Patent Portfolio, Patent Filing Strategy, Start-Up Company