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Protecting Intellectual Property Rights: Are Small Firms Handicapped?

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Author Info
Lanjouw, Jean O
Schankerman, Mark
Abstract

This paper studies the determinants of patent suits and settlements during 1978-99 by linking information from the U.S. patent office, the federal courts, and industry sources. We find that litigation risk is much higher for patents that are owned by individuals and firms with small patent portfolios. Patentees with a large portfolio of patents to trade, or other characteristics that facilitate "cooperative" resolution of disputes, are much less likely to prosecute infringement suits. However, postsuit outcomes do not depend on these characteristics. These findings show that small patentees are at a significant disadvantage in protecting their patent rights because their greater litigation risk is not offset by more rapid resolution of their suits. Our empirical estimates of the heterogeneity in litigation risk can help in developing private patent litigation insurance to mitigate the adverse affects of high enforcement costs.

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Publisher Info
Article provided by University of Chicago Press in its journal Journal of Law and Economics.

Volume (Year): 47 (2004)
Issue (Month): 1 (April)
Pages: 45-74
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Handle: RePEc:ucp:jlawec:y:2004:v:47:i:1:p:45-74

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  1. Andreas Panagopoulos & In-Uck Park, 2008. "Patent Protection, Takeovers, and Startup Innovation: A Dynamic Approach," The Centre for Market and Public Organisation 08/201, Department of Economics, University of Bristol, UK. [Downloadable!]
  2. Alfons Palangkaraya & Paul H. Jensen & Elizabeth Webster, 2005. "Determinants of International Patent Examination Outcomes," Melbourne Institute Working Paper Series wp2005n06, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
  3. Kaplan, David S. & Sadka, Joyce, 2008. "Enforceability of labor law : evidence from a labor court in Mexico," Policy Research Working Paper Series 4483, The World Bank. [Downloadable!]
  4. Wilfred Dolfsma, 2008. "Innovation Systems as Patent Networks," Working Papers id:1651, esocialsciences.com. [Downloadable!]
  5. Alberto Galasso & Mark Schankerman, 2008. "Patent Thickets and the Market for Innovation: Evidence from Settlement of Patent Disputes," CEP Discussion Papers dp0889, Centre for Economic Performance, LSE. [Downloadable!]
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  6. 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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  7. Alberto Galasso, 2007. "Broad Cross-License Agreements andPersuasive Patent Litigation: Theory andEvidence from the Semiconductor Industry," STICERD - Economics of Industry Papers 45, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
  8. Katrin Cremers, 2009. "Settlement during patent litigation trials. An empirical analysis for Germany," The Journal of Technology Transfer, Springer, vol. 34(2), pages 182-195, April. [Downloadable!] (restricted)
  9. Pitelis, Christos & Panagopoulosi, Andreas, 2009. "Innovation Governance for Value Capture -The Problem and a Proposed Simple Model-based Solution," Papers DYNREG42, Economic and Social Research Institute (ESRI). [Downloadable!]
  10. 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!]
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