Abstract: Firm’s decision on whether to apply for a patent or not is subject to patenting motives, and patenting motives are influenced by various factors inside or outside the company. Based on literature review, this study aims to explain the relationship firm characteristics and patenting decision, and analyses the mediating effect of various patenting motives, including market protection, technology exchange, block and reputation. Firm characteristics include 3 dimensions: resource base, technological innovation strategy and knowledge base. The empirical results show that industry position, R&D intensity, product innovation and the generality of innovation output affect the patenting decision in an indirect way. The sizes of company and process innovation have no influence on patenting decision. What’s more, reputation motive show little mediating effect between internal factors and patenting decision. All these results suggest that firms which have weak resource base and low-intensity R&D investment, conduct process more than product innovation and have more tacit knowledge will not apply for a patent. This is mainly because they lack the motives to apply for a patent.