IDEAS home Printed from https://ideas.repec.org/a/ucp/jlawec/doi10.1086-655757.html
   My bibliography  Save this article

The Litigation of Financial Innovations

Author

Listed:
  • Josh Lerner

Abstract

This paper examines the litigation of patents relating to financial products and services. I show that these grants are being litigated at a rate 27-39 times greater than that of patents as a whole. The patents being litigated are disproportionately those issued to individuals and to smaller, private entities and those with features that may proxy for higher quality. Larger entities are disproportionately targeted in litigation. I discuss how the findings are in large part consistent with the theoretical literature on the economics of litigation.

Suggested Citation

  • Josh Lerner, 2010. "The Litigation of Financial Innovations," Journal of Law and Economics, University of Chicago Press, vol. 53(4), pages 807-831.
    • Handle: RePEc:ucp:jlawec:doi:10.1086/655757
    DOI: 10.1086/655757
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/655757
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: http://dx.doi.org/10.1086/655757
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/655757?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lanjouw, Jean O & Schankerman, Mark, 2001. "Characteristics of Patent Litigation: A Window on Competition," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 129-151, Spring.
    2. Tufano, Peter, 1989. "Financial innovation and first-mover advantages," Journal of Financial Economics, Elsevier, vol. 25(2), pages 213-240, December.
    3. Browne, Mark J & Puelz, Robert, 1999. "The Effect of Legal Rules on the Value of Economic and Non-economic Damages and the Decision to File," Journal of Risk and Uncertainty, Springer, vol. 18(2), pages 189-213, August.
    4. Miller, Merton H., 1986. "Financial Innovation: The Last Twenty Years and the Next," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 21(4), pages 459-471, December.
    5. Josh Lerner, 2002. "Where Does State Street Lead? A First Look at Finance Patents, 1971 to 2000," Journal of Finance, American Finance Association, vol. 57(2), pages 901-930, April.
    6. Lanjouw, Jean O & Pakes, Ariel & Putnam, Jonathan, 1998. "How to Count Patents and Value Intellectual Property: The Uses of Patent Renewal and Application Data," Journal of Industrial Economics, Wiley Blackwell, vol. 46(4), pages 405-432, December.
    7. George L. Priest & Benjamin Klein, 1984. "The Selection of Disputes for Litigation," The Journal of Legal Studies, University of Chicago Press, vol. 13(1), pages 1-56, January.
    8. Rosenberg, D. & Shavell, S., 1985. "A model in which suits are brought for their nuisance value," International Review of Law and Economics, Elsevier, vol. 5(1), pages 3-13, June.
    9. Joseph Farrell & Carl Shapiro, 2008. "How Strong Are Weak Patents?," American Economic Review, American Economic Association, vol. 98(4), pages 1347-1369, September.
    10. Bebchuk, Lucian Arye, 1988. "Suing Solely to Extract a Settlement Offer," The Journal of Legal Studies, University of Chicago Press, vol. 17(2), pages 437-450, June.
    11. Lanjouw, Jean O & Lerner, Josh, 2001. "Tilting the Table? The Use of Preliminary Injunctions," Journal of Law and Economics, University of Chicago Press, vol. 44(2), pages 573-603, October.
    12. Van Horne, James C, 1985. "Of Financial Innovations and Excesses," Journal of Finance, American Finance Association, vol. 40(3), pages 621-631, July.
    13. Jean O. Lanjouw & Ariel Pakes & Jonathan Putnam, 1998. "How to Count Patents and Value Intellectual Property: The Uses of Patent Renewal and Application Data," Journal of Industrial Economics, Wiley Blackwell, vol. 46(4), pages 405-432, December.
    14. Lerner, Josh, 2006. "The new new financial thing: The origins of financial innovations," Journal of Financial Economics, Elsevier, vol. 79(2), pages 223-255, February.
    15. Dietmar Harhoff & Francis Narin & F. M. Scherer & Katrin Vopel, 1999. "Citation Frequency And The Value Of Patented Inventions," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 511-515, August.
    16. Harhoff, Dietmar & Scherer, Frederic M. & Vopel, Katrin, 2003. "Citations, family size, opposition and the value of patent rights," Research Policy, Elsevier, vol. 32(8), pages 1343-1363, September.
    17. Cooter, Robert D & Rubinfeld, Daniel L, 1989. "Economic Analysis of Legal Disputes and Their Resolution," Journal of Economic Literature, American Economic Association, vol. 27(3), pages 1067-1097, September.
    18. Lerner, Josh, 1995. "Patenting in the Shadow of Competitors," Journal of Law and Economics, University of Chicago Press, vol. 38(2), pages 463-495, October.
    19. Robert C. Merton, 1992. "Financial Innovation And Economic Performance," Journal of Applied Corporate Finance, Morgan Stanley, vol. 4(4), pages 12-22, January.
    20. Patricia Munch Danzon, 1983. "Contingent Fees for Personal Injury Litigation," Bell Journal of Economics, The RAND Corporation, vol. 14(1), pages 213-224, Spring.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mark A. Lemley & Carl Shapiro, 2005. "Probabilistic Patents," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 75-98, Spring.
    2. Cédric Schneider, 2011. "The battle for patent rights in plant biotechnology: evidence from opposition fillings," The Journal of Technology Transfer, Springer, vol. 36(5), pages 565-579, October.
    3. Schankerman, Mark & Lanjouw, Jean, 2001. "Enforcing Intellectual Property Rights," CEPR Discussion Papers 3093, C.E.P.R. Discussion Papers.
    4. W. Scott Frame & Lawrence J. White, 2004. "Empirical Studies of Financial Innovation: Lots of Talk, Little Action?," Journal of Economic Literature, American Economic Association, vol. 42(1), pages 116-144, March.
    5. Philipp N. Baecker, 2007. "Real Options and Intellectual Property," Lecture Notes in Economics and Mathematical Systems, Springer, number 978-3-540-48264-2, December.
    6. Tamer Khraisha & Keren Arthur, 2018. "Can we have a general theory of financial innovation processes? A conceptual review," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 4(1), pages 1-27, December.
    7. Dietmar Harhoff & Georg von Graevenitz & Stefan Wagner, 2016. "Conflict Resolution, Public Goods, and Patent Thickets," Management Science, INFORMS, vol. 62(3), pages 704-721, March.
    8. Linda R. Cohen & Jun Ishii, 2005. "Competition, Innovation and Racing for Priority at the U.S. Patent and Trademark Office," Working Papers 050604, University of California-Irvine, Department of Economics.
    9. Hamid Mohtadi & Stefan Ruediger, 2014. "Volatility and Transparency of Financial Markets in the MENA Region," BIFEC Book of Abstracts & Proceedings, Research and Business Development Department, Borsa Istanbul, vol. 1(2), pages 173-195, March.
    10. Bronwyn H. Hall & Grid Thoma & Salvatore Torrisi, 2009. "Financial Patenting in Europe," NBER Working Papers 14714, National Bureau of Economic Research, Inc.
    11. Mehmet Balcilar & Riza Demirer, 2014. "The Effect of Global Shocks and Volatility on Herd Behavior in Borsa Istanbul," BIFEC Book of Abstracts & Proceedings, Research and Business Development Department, Borsa Istanbul, vol. 1(2), pages 142-172, March.
    12. Mohd Shadab Danish & Pritam Ranjan & Ruchi Sharma, 2022. "Assessing the Impact of Patent Attributes on the Value of Discrete and Complex Innovations," Papers 2208.07222, arXiv.org.
    13. Mohd Shadab Danish & Pritam Ranjan & Ruchi Sharma, 2021. "Identification of “Valuable” Technologies via Patent Statistics in India: An Analysis Based on Renewal Information," BASE University Working Papers 13/2021, BASE University, Bengaluru, India.
    14. Nicolas van Zeebroeck & Bruno van Pottelsberghe de la Potterie, 2011. "Filing strategies and patent value," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 20(6), pages 539-561, February.
    15. Nicolas van Zeebroeck, 2011. "The puzzle of patent value indicators," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 20(1), pages 33-62.
    16. Fabian Kuehnhausen, 2014. "The Impact of Financial Innovation on Firm Stability," BIFEC Book of Abstracts & Proceedings, Research and Business Development Department, Borsa Istanbul, vol. 1(2), pages 211-239, March.
    17. Catherine Y. Co, 2004. "How Valuable are the Patents Behind Section 337 Cases?," The World Economy, Wiley Blackwell, vol. 27(4), pages 525-539, April.
    18. Antonio Messeni Petruzzelli & Daniele Rotolo & Vito Albino, 2014. "Determinants of Patent Citations in Biotechnology: An Analysis of Patent Influence Across the Industrial and Organizational Boundaries," SPRU Working Paper Series 2014-05, SPRU - Science Policy Research Unit, University of Sussex Business School.
    19. Yuan Zhou & Fang Dong & Yufei Liu & Liang Ran, 2021. "A deep learning framework to early identify emerging technologies in large-scale outlier patents: an empirical study of CNC machine tool," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(2), pages 969-994, February.
    20. Caviggioli, Federico & Scellato, Giuseppe & Ughetto, Elisa, 2013. "International patent disputes: Evidence from oppositions at the European Patent Office," Research Policy, Elsevier, vol. 42(9), pages 1634-1646.

    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlawec:doi:10.1086/655757. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JLE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.