Empirical Evidence on the Validity of Litigated Patents

Allison, John R.; Lemley, Mark A.

doi:10.2139/ssrn.118149

Cited by 113 publications

(94 citation statements)

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“…The number of inventors has a strong positive impact on all indicators (in line with Reitzig, 2004b), as is the case for non patent references (in line with Carpenter et al (1980) and Narin et al (1987), but in contradiction with Reitzig (2004b), who obtained a negative coefficient, and Allison and Lemley (1998), Harhoff and Hall (2002), , Harhoff andReitzig (2004), andWagner (2004), who all obtained a non-significant impact).…”

Section: Complexitymentioning

confidence: 58%

Filing strategies and patent value

Zeebroeck

Potterie

2011

Economics of Innovation and New Technology

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This paper aims at contributing to the literature on the determinants of patent value. First, it puts forward a new potential class of value determinants in the form of filing strategies (encompassing filing routes and drafting styles). Second, it provides empirical evidence suggesting that these strategies are consistently and positively associated with patent value indicators. The empirical implementation relies on a unique dataset (about 250,000 patents granted by the EPO), which allows running large-scale sensitivity tests. The results reveal that the new determinants this paper puts forward -filing strategies -are the most stable of all. They also underline strong dependencies of several 'classical' results to the dependent variables and sampling methodologies, partly explaining several inconsistencies observed in the literature. March 2008 AbstractThis paper aims at contributing to the literature on the determinants of patent value. First, it puts forward a new potential class of value determinants in the form of filing strategies (encompassing filing routes and drafting styles). Second, it provides empirical evidence suggesting that these strategies are consistently and positively associated with patent value indicators. The empirical implementation relies on a unique dataset (about 250,000 patents granted by the EPO), which allows running large-scale sensitivity tests. The results reveal that the new determinants this paper puts forward -filing strategies -are the most stable of all. They also underline strong dependencies of several 'classical' results to the dependent variables and sampling methodologies, partly explaining several inconsistencies observed in the literature.

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Section: Complexitymentioning

confidence: 58%

Filing strategies and patent value

Zeebroeck

Potterie

2011

Economics of Innovation and New Technology

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“…Second, patent protection is probabilistic. Many patent applications are not approved, 1 and as Choi (1998) and Lemley and Shapiro (2005) emphasize, even issued patents can be ruled invalid through litigation. 2 Given the requirement for full disclosure of innovation information during the patenting process, the information that is revealed may be utilized to the bene…t of rival …rms under conditions of imperfect patent protection.…”

Section: Introductionmentioning

confidence: 99%

Patenting in the shadow of independent discoveries by rivals

Zhang

2012

International Journal of Industrial Organization

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Abstract. This paper studies the decision of whether to apply for a patent in a dynamic model in which …rms innovate stochastically and independently. In the model, a …rm can choose between patenting and maintaining secrecy to protect a successful innovation. I consider a legal environment characterized by imperfect patent protection and no prior user rights. Thus, patenting grants probabilistic protection, and secrecy is e¤ectively maintained until rivals innovate. I show that (1) …rms that innovate early are more inclined to choose secrecy, whereas …rms that innovate late have a stronger tendency to patent; (2) the incentives to patent increase with the innovation arrival rate; and (3) an increase in the number of …rms may cause patenting to occur earlier or later, depending on the strength of patent protection. The socially optimal level of patent protection, which balances the trade-o¤ between the provision of patenting incentives and the avoidance of deadweight loss caused by a monopoly, is lower with a higher innovation arrival rate or a larger number of …rms.

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“…The number of patents granted in the U.S. has increased by 60%, from 97,000 in 1992 to 157,000 in 2007. 1 Meanwhile, the number of patent suits has risen even faster: The number of patent infringement cases filed every year went from 1,171 in 1991 to 3,075 in 2004. 2 Nevertheless, findings from empirical studies show that a large number of patent litigations are resolved through settlements rather than trials (95%, according to Lanjouw and Schankerman, 2001).…”

Section: Introductionmentioning

confidence: 99%

“…We show that settlements and the settlement amount can be used strategically as a barrier to entry in an asymmetric information environment where an incumbent patent holder faces the threat of 1 Source: United States Patent and Trademark Office (USPTO). 2 Source: PricewaterhouseCoopers.…”

Section: Introductionmentioning

confidence: 99%

Patent Settlements as a Barrier to Entry

Duchêne¹,

Serfes²

2012

Economics Manag Strategy

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Empirical studies have found that most patent litigations are resolved through settlements rather than trials. Moreover, license fees negotiated in settlement agreements have become very large. We formulate a model of sequential entry with an incumbent patent holder, multiple potential entrants and asymmetric information about the validity of the contested patent (patent strength) between firms that are already in the market and future potential entrants. Within this framework we show that patent settlements between the incumbent and the first entrant can be mutually beneficial even when the cost of trial is zero and the settlement agreement takes the form of a simple fixed license fee. For intermediate patent strengths, settlements are a tool for further entry deterrence. The two parties agree on a high settlement amount which sends a credible signal to 'outsiders' that the incumbent's patent is not weak and therefore further entry will not be profitable. This provides a novel explanation for the role of settlements and to the recent observation of high license fees negotiated in settlement agreements. Our analysis demonstrates than even non-reverse settlements that entail only a fixed fee can be anticompetitive because they are used to block further entry.

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Empirical Evidence on the Validity of Litigated Patents

Cited by 113 publications

References 0 publications

Filing strategies and patent value

Filing strategies and patent value

Patenting in the shadow of independent discoveries by rivals

Patent Settlements as a Barrier to Entry

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