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Are Patent Litigation Insurances Fit for the Dynamics of Innovation?

Author

Listed:
  • Christian Ben Lakhdar

    (ESSEC Doctoral Program and University of Paris 1 Panthéon-Sorbonne)

Abstract

Patent insurance policies allow firms to externalise the legal cost in case of conflicts. These litigation insurances may incite innovators to sue more often, which would increase the social cost of litigation. By modelling a patent file, we show that these patent litigation insurances incite innovators to claim for wider breadth patent too. Wider breadth patents could lead to an increased number of legal conflicts but could also lead to a slackening in the process of innovation improvement. We come to the conclusion that the effects of these insurance schemes on the welfare are really indeterminate.

Suggested Citation

  • Christian Ben Lakhdar, 2005. "Are Patent Litigation Insurances Fit for the Dynamics of Innovation?," Rivista di Politica Economica, SIPI Spa, vol. 95(5), pages 69-90, September.
    • Handle: RePEc:rpo:ripoec:v:95:y:2005:i:5:p:69-90
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    More about this item

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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