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Litigation and Settlement in Patent Infringement Cases

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Author Info
Claude Crampes
Corinne Langinier

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Abstract

A patent grants its owner the right to sue intruders that have been identified. The patentholder must then supervise the market and react in case of infringement. His reaction may be to go to court, to settle, or to accept entry. We investigate how intensive the monitoring effort should be and how it will influence the entry decision. In a simultaneous game, even if the penalty paid by the infringer in case of a finding of liability is high, the patentholder may prefer a settlement to a trial. The likelihood of entry may increase with the penalty. In sequential games, regardless who plays first, entry occurs comparatively less often than in the simultaneous game.

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Publisher Info
Article provided by The RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 33 (2002)
Issue (Month): 2 (Summer)
Pages: 258-274
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Handle: RePEc:rje:randje:v:33:y:2002:i:summer:p:258-274

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  1. Roland Kirstein & Birgit Will, 2006. "Efficient compensation for employees' inventions," European Journal of Law and Economics, Springer, vol. 21(2), pages 129-148, April. [Downloadable!] (restricted)
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  2. Mario Calderini & Giuseppe Scellato, 2004. "Intellectual property rights as strategic assets: the case of european patent opposition in the telecommunication industry," CESPRI Working Papers 158, CESPRI, Centre for Research on Innovation and Internationalisation, Universita' Bocconi, Milano, Italy, revised Jul 2004. [Downloadable!]
  3. Jay Pil Choi, 2006. "How Reasonable is the ‘Reasonable’ Royalty Rate? Damage Rules and Probabilistic Intellectual Property Rights," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  4. Llobet, Gerard & Suarez, Javier, 2005. "Financing and the Protection of Innovators," CEPR Discussion Papers 4944, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  5. repec:att:wimass:1920030 is not listed on IDEAS
  6. Carlos J. POnce, 2007. "More secrecy... more knowledge disclosure? : On disclosure outside of patents," Economics Working Papers we077241, Universidad Carlos III, Departamento de Economía. [Downloadable!]
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  7. Langinier, Corinne, 2004. "Using patents to mislead rivals," Staff General Research Papers 11483, Iowa State University, Department of Economics.
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  8. Adriana Breccia & Hector Salgado-Banda, 2005. "Competing or Colluding in a Stochastic Framework," Birkbeck Working Papers in Economics and Finance 0504, Birkbeck, Department of Economics, Mathematics & Statistics. [Downloadable!]
  9. repec:bep:rlecon:3:2007:2:14 is not listed on IDEAS
  10. David Encaoua & Yassine Lefouili, 2009. "Licensing weak patents," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00415747_v1, HAL. [Downloadable!]
  11. Langinier, Corinne & Marcoul, Philippe, 2005. "Contributory Infringement Rule and Patents," Staff General Research Papers 12268, Iowa State University, Department of Economics. [Downloadable!]
  12. Philipp N. Baecker, 2006. "An Option-Based View of Imperfect Patent Protection," ebs Working Papers on Finance and Accounting 060601, Department of Finance and Accounting, EUROPEAN BUSINESS SCHOOL (ebs), International University Schloß Reichartshausen, revised 10 Jan 2007. [Downloadable!]
  13. Adriana Breccia & Hector Salgado-Banda, 2006. "Competing or Colluding in a Stochastic Environment," Computing in Economics and Finance 2006 423, Society for Computational Economics. [Downloadable!]
  14. James Bessen & Michael J. Meurer, 2005. "Patent Litigation with Endogenous Disputes," Working Papers 0502, Research on Innovation. [Downloadable!]
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  15. Georg von Graevenitz, 2007. "Which Reputations Does a Brand Owner Need? Evidence from Trade Mark Opposition," Discussion Papers 215, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
  16. Cremers, Katrin, 2004. "Determinants of Patent Litigation in Germany," ZEW Discussion Papers 04-72, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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