The impact of patent litigation on shareholder value in the smartphone industry

Nam, Sangjun; Nam, Changi; Kim, Seong-Cheol

doi:10.1016/j.techfore.2015.01.015

Cited by 33 publications

(15 citation statements)

References 22 publications

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“…We tested our hypotheses in the context of the smartphone industry, which emerges from the application of mobile phone technology in the telecommunication sector (Paik and Zhu, 2016). This field is highly dynamic and is also characterized by quick updates, high correlations and frequent exchanges (Shi and Zhang, 2018), in which numerous knowledge stocks and many events of innovations can be observed (Nam et al, 2015). Thus, our main dependent and independent variables were calculated based on smartphone patent data granted to firms.…”

Section: Data Collectionmentioning

confidence: 99%

The double-edged sword of external search in collaboration networks: embeddedness in knowledge networks as moderators

Shi

Zhang

Zheng

2019

JKM

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Purpose The purpose of this paper is to analyze the inverted U-shaped relationship between external search in the collaboration network and firm innovation outcomes. It also seeks to explore whether these curvilinear relationships are moderated by the network centrality and structural holes in the knowledge network. Design/methodology/approach In this empirical research, the authors collected a sample of patents in the smartphone industry over the period of 2000-2017. Then the authors examined the direct roles of external search breadth and depth in the collaboration network and the moderating role of network embeddedness in the knowledge network by using negative binomial regression. Findings Results found that external search in the collaboration network contributes more to firm innovation outcomes when the breadth and depth of the external search are moderate rather than high or low. Furthermore, both network centrality and structural holes in the knowledge network have positive effects on the external search breadth – innovation outcomes and external search depth – innovation outcomes relationships. Research limitations/implications The authors collected the patent data within the single industry and excluded other types of industries. This may limit the generalization of the findings. Practical implications The paper has practical implications for adopting appropriate search strategies in the collaboration network and developing a better understanding of the effect of network embeddedness in the knowledge network on firm innovation outcomes. The findings suggest future directions for technology-intensive industries to improve their innovation output. Originality/value This study adds value to open innovation literature by pointing out a curvilinear relationship (inverted U-shaped) between external search breadth/depth and innovation outcomes in collaboration networks, in contrast to studies focused on firms’ external collaboration strategies in a certain industry context. Furthermore, this study reinforces the key contingent role of embeddedness in knowledge networks. This study provides a valuable theoretical framework of innovation outcome determinants by connecting the network perspective of open innovation theory with an embeddedness view.

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Section: Data Collectionmentioning

confidence: 99%

The double-edged sword of external search in collaboration networks: embeddedness in knowledge networks as moderators

Shi

Zhang

Zheng

2019

JKM

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“…In this regard, patent wars could be studied as a strategic phenomenon whose output is determined by the potential reputation effects on the firms involved. Nam, S., Nam, C. & Kim (2015) analyzed the main wealth effects of patent litigation in the smartphone industry, focusing particularly on the negative stock returns faced by Asian firms when being sued by Apple. The same type of analysis was performed by Wang, Lin, W.-R., Lin, S.-S. & Hung (2017), who observed empirically how market leaders experienced lower risks when facing lawsuits regarding patent infringements, while the risk reactions of competitors differed substantially during a patent war.…”

Section: Discussionmentioning

confidence: 99%

Strategic Signaling and New Technologically Superior Product Introduction: A Game-Theoretic Model With Simulation

Tavana

Caprio

Santos‐Arteaga

2018

Technological and Economic Development of Economy

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Abstract. User acceptance of technology is essential to determine its success. The current paper incorporates the main properties of the technology acceptance models (TAMs) developed by management scholars into a pre-commitment signaling duopolistic framework, where two competing firms must decide the level of technological improvement of the products being introduced. As a result, the corresponding equilibria of the duopolistic technological games will be determined by demand-based factors, providing a novel approach and complementing the current supply-based economic and operational research models developed in the literature. The proposed model will be simulated numerically to illustrate the strategic optimality of the update process of smartphone and tablet characteristics defined by Apple and Samsung as the market developed.

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“…Being involved in litigation occupies time and resources and may be harmful to firms' revenue (Nam et al, 2015). Bhagat et al (1994) and Lerner (1995) find that firms involved in patent suits will get a 2% to 3.1% decrease in market value and the direct cost of patent cases is also very high, while pre-trial settlement can solve litigations in a shorter time mitigating the potential cost.…”

Section: Ip Litigationmentioning

confidence: 99%

Pursuing justice or protecting local firms? Shenzhen courts move beyond judicial local protectionism

2020

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Emerging economies represent a vivid market for firms worldwide who are massively investing in R&D. This tendency is generating an increase in the number of intellectual property (IP) registrations and is expanding the markets for IP. However, emerging economies tend to show unfair judicial systems, being unable to ensure IP rights protection, and to allow companies to benefit from their inventions. China is one of the most important emerging economies, and both domestic and foreign companies are investing a considerable amount of money in R&D and IP activities, especially in innovative cities such as Shenzhen. In this study, we aim to investigate whether the Chinese judicial system, using the city of Shenzhen as our empirical context, is fair in protecting IP rights. We use data about IP litigations from 2014 to 2016, targeting the three most relevant outcomes: settlement, judgment, and the amount of damage awards recognized by the court. The study shows no evidence that Shenzhen courts rule in favor of local firms, and the findings show consistency regarding settlement, the winning probability in judgment, and amount of damage awards. Accordingly, we derive managerial implications demonstrating that Shenzhen is a very international arena and firms act following the classic strategic theories of innovation appropriation.

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The impact of patent litigation on shareholder value in the smartphone industry

Cited by 33 publications

References 22 publications

The double-edged sword of external search in collaboration networks: embeddedness in knowledge networks as moderators

The double-edged sword of external search in collaboration networks: embeddedness in knowledge networks as moderators

Strategic Signaling and New Technologically Superior Product Introduction: A Game-Theoretic Model With Simulation

Pursuing justice or protecting local firms? Shenzhen courts move beyond judicial local protectionism

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