In a time of growing numbers of patent applications and a more intensified discussion about the broadening of patentability and the linked changing of patent quality a differentiated investigation of the quality and implications of patents in the European economies and societies is of great importance. The goal of this study is to assess the value of the patents and their impact on the economic developments in Europe. The analyses based on the PatVal dataset will cover the PatVal countries, viz. France, Germany, Italy, UK, Spain, and Netherlands. Moreover, we expand the PatVal survey to Denmark, Sweden, and Hungary. Denmark and Sweden have been added because they are small countries with intensive technological activities. Hungary is included to add a New Member State, and particularly the one that is more active technologically. A team of several European research institutions will undertake a comprehensive study on the patent system which is separated in two main parts. The objective of our proposed work in Part 1 is to provide a comprehensive study of the existing state of the art about the economic value of patents. This will be accomplished by A) a survey of the existing scientific literature in economics and business studies, along with relevant policy documents and reports whenever available in the public domain and B) descriptive statistics using available data.We organized our analysis in the first Part under two headings and will study them systematically both by assessing the relevant literature and by providing descriptive statistics to offer a comprehensive panorama of the available knowledge: Direct economic effects of patents, as it deals with the direct benefits of patents and Soft, Indirect Effects of Patents that have proved to be of the utmost importance in recent years, in practice, for policy-making, and in the economic literature on patents.The overall objective of Part 2 is to assess the advantages and disadvantages of the patent system from comprehensive empirical evidence representative for most of the EU and technological areas. Specifically, it is the objective to assess the value of patents through direct measures and other indicators of the impact of patents on the economy and society. Moreover, we will provide an empirical analysis of some soft, indirect effects of the patent system, most notably entrepreneurship and spillovers.The analysis of the direct economic effects of patents will focus on regression-based empirical models to estimate the economic value of patents. We will use alternative indicators of the economic value of patents, from the monetary indicators obtained from the PatVal survey to correlates of the patent value suggested by the literature (citations, claims, etc.). Ultimately, our goal is to produce estimates of the economic value of patents to be predicted from patent characteristics. The analysis will be broken down by country/regions, technological areas and type of applicants. As a result, from the predictor characteristics we will be able to aggregate our estimates of the value of patents to the level of countries, technological areas and types of applicants. Additionally, the PatVal dataset enables us to obtain information on whether the patent in the sample was: i) used internally by the assignee for economic purposes; ii) licensed; iii) left unused. We will then develop empirical models that predict these choices. This will enable us to identify the characteristics of the unused patents, and of the patents that are employed in the market for technology. Moreover, by using estimates of the value of patents we can estimate the potential value of patents that are left unused. This is one of the very first attempts to empirically estimate the extent of the potential economic value of unused patents.PatVal asks specifically to the interviewee whether the patent was used to create a new firm in order to asses the Soft or indirect effects of Patents. We will produce empirical models that predict the creation of new firms from patents. The value of these firms, along with other characteristics, can then be used to predict the employment potential of these firms. The goal of this analysis is to carefully assess the extent of the social benefits of patents produced by their contribution to knowledge spillovers. PatVal enables us to identify the motives for patenting. We will then test whether the patents that have been applied for strategic reasons are cited less than others. Within the third heading of Part 2 we will provide a comprehensive discussion of the policy implications for enhancing the value of patents, their use, and more generally their social advantages vis--vis their social costs, following the empirical analyses of the previous two headings. In all our empirical analyses we will provide a wide coverage of the European countries and technological areas. The analyses that use the ZEW-EPO dataset will cover all the countries and IPC classes of the European patents.