Importance Many projects provide companies with additional investment opportunities and, therefore, they increase cost of a company even with negative net present value. The rights to take a certain management solution, provided by this kind of projects, are often evaluated along the lines of financial options. Patents are a prime example of real options, and real options that relate to patents are determined by the objectives, which are set by companies investing in patents. Objectives The objectives of the article include as follows: to analyze the functions of patents and the features of projects, which are related to investments in patents and have the characteristics of real options; to review the patent valuation models as real options and to consider the applicability limits of this kind of samples; to explore the studies that empirically test the results of real option valuation models. Methods In various branches of economy, patents perform different functions, which have an impact on the choice of a patent evaluation model. Results Patents have the features of real options because they provide companies with additional possibilities in the future. Real options, which are often generated by patents, are connected with a possibility to obtain monopoly profit or royalty earnest. However, companies can invest in patents with other goals, and they determine other real options. Conclusions and Relevance I emphasize that not all findings of the models of patent evaluation as real options are confirmed empirically, but a positive impact of patents on company's value has been proved.
Keywords: real option, patent, compound option, patent function, risk-analysis
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