In this paper, we take a closer look at the implicit subsidy provided to inventors by patent systems, based on analysis of novel survey data on almost 1500 Australian inventions. We surveyed inventors who had applied for a patent between 1986 and 2005 and asked them a range of questions relating to the revenues generated by their inventions. Since some patent applications were unsuccessful, we have information about the private value of both patented and unpatented inventions. Moreover, there is considerable variation in the commercialization outcomes across patented and unpatented inventions. This variation is the key to our empirical identification of the 'patent premium'. Given that firms choose their intellectual property management strategies from a range of different appropriation mechanisms - which are well-known to vary in their effectiveness - our results have important implications for the strategic management of inventive activity.