Advanced Search
MyIDEAS: Login to save this paper or follow this series

Economic Consequences of a Changing Litigation Environment: The Case of Patents

Contents:

Author Info

  • Jean Olson Lanjouw
Registered author(s):

    Abstract

    A model of patent infringement is developed to analyze the relationship between litigation and aspects of the legal environment such as the probability that the patent is found valid, the size of legal fees and their allocation across agents. Potential challengers first decide whether to infringe and then the patentee decides whether or not to prosecute. The outcome of this game has a fundamental impact on the value of patent protection to a patentee. This model is then linked to a patent renewal model which explicitly incorporates the legal parameters of interest from the litigation game. Estimates of the renewal model allow the empirical estimation of the private value of a patent protection. Simulations are presented for Germany which show the quantitative impact of changes in the legal environment on the value generated by the patent system and hence the incentives created for innovation.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.nber.org/papers/w4835.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4835.

    as in new window
    Length:
    Date of creation: Aug 1994
    Date of revision:
    Handle: RePEc:nbr:nberwo:4835

    Note: LE PR
    Contact details of provider:
    Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
    Phone: 617-868-3900
    Email:
    Web page: http://www.nber.org
    More information through EDIRC

    Related research

    Keywords:

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Edwin Mansfield, 1986. "Patents and Innovation: An Empirical Study," Management Science, INFORMS, INFORMS, vol. 32(2), pages 173-181, February.
    2. Loury, Glenn C, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 93(3), pages 395-410, August.
    3. Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, Elsevier, vol. 27(2), pages 253-279, August.
    4. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3), pages 783-832.
    5. Cooter, Robert D & Rubinfeld, Daniel L, 1989. "Economic Analysis of Legal Disputes and Their Resolution," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 27(3), pages 1067-97, September.
    6. Ariel Pakes & Mark Schankerman, 1979. "The Rate of Obsolescence Of Knowledge, Research Gestation Lags, and the Private Rate of Return to Research Resources," NBER Working Papers 0346, National Bureau of Economic Research, Inc.
    7. Jean Olson Lanjouw, 1992. "Under Threat: Potential Competition, Litigation and the Private Value of Patent Protection," STICERD - Economics of Industry Papers, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE 06, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    8. Simon Kuznets, 1962. "Inventive Activity: Problems of Definition and Measurement," NBER Chapters, National Bureau of Economic Research, Inc, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 19-52 National Bureau of Economic Research, Inc.
    9. Ariel Pakes, 1986. "Patents as Options: Some Estimates of the Value of Holding European Patent Stocks," NBER Working Papers 1340, National Bureau of Economic Research, Inc.
    10. Kathryn E. Spier, 1994. "Pretrial Bargaining and the Design of Fee-Shifting Rules," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 197-214, Summer.
    11. Claude d'Aspremont & Alexis Jacquemin & Jean Jaskold Gabszewicz & John A. Weymark, 1983. "On the Stability of Collusive Price Leadership," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 16(1), pages 17-25, February.
    12. Stanley M. Besen & Leo J. Raskind, 1991. "An Introduction to the Law and Economics of Intellectual Property," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 5(1), pages 3-27, Winter.
    13. Sullivan, Richard J, 1994. "Estimates of the Value of Patent Rights in Great Britain and Ireland, 1852-1876," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 61(241), pages 37-58, February.
    14. Reinganum, Jennifer F., 1989. "The timing of innovation: Research, development, and diffusion," Handbook of Industrial Organization, Elsevier, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 14, pages 849-908 Elsevier.
    15. Jean Olson Lanjouw, 1992. "Under threat: potential competition, litigation and the private value of patent protection," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 6777, London School of Economics and Political Science, LSE Library.
    16. Jean Olson Lanjouw, 1993. "Patent Protection: Of What Value and for How Long?," NBER Working Papers 4475, National Bureau of Economic Research, Inc.
    17. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1988. "Appropriating the Returns from Industrial R&D," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 862, Cowles Foundation for Research in Economics, Yale University.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Marco, Alan C., 2005. "The option value of patent litigation: Theory and evidence," Review of Financial Economics, Elsevier, Elsevier, vol. 14(3-4), pages 323-351.
    2. Bronwyn H. Hall & Rose Marie Ham, 1999. "The Patent Paradox Revisited: Determinants of Patenting in the US Semiconductor Industry, 1980-94," NBER Working Papers 7062, National Bureau of Economic Research, Inc.
    3. Hall, Bronwyn H. & Ham Ziedonis, Rosemarie, 1999. "Patent Paradox Revisited: Determinants of Patenting in the U.S. Semiconductor Industry, 1980-94," Competition Policy Center, Working Paper Series, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley qt1rg1088v, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
    4. Marco, Alan C., 2005. "Learning by Suing: Structural Estimates of Court Errors in Patent Litigation," Vassar College Department of Economics Working Paper Series, Vassar College Department of Economics 68, Vassar College Department of Economics.
    5. Joshua S. Gans & Scott Stern, 2000. "When Does Funding Research by Smaller Firms Bear Fruit?: Evidence from the SBIR Program," NBER Working Papers 7877, National Bureau of Economic Research, Inc.
    6. Adam B. Jaffe, 1999. "The U.S. Patent System in Transition: Policy Innovation and the Innovation Process," NBER Working Papers 7280, National Bureau of Economic Research, Inc.
    7. Alan Marco & Gordon Rausser, 2011. "Complementarities and spillovers in mergers: an empirical investigation using patent data," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 20(3), pages 207-231.
    8. Marco, Alan C., 2006. "The Value of Certainty in Intellectual Property Rights: Stock Market Reactions to Patent Litigation," Vassar College Department of Economics Working Paper Series, Vassar College Department of Economics 82, Vassar College Department of Economics.
    9. Gans, Joshua, 1968- & Stern, Scott, 1969-, 1998. "Incumbency and R&D incentives : licensing the gale of creative distruction," Working papers, Massachusetts Institute of Technology (MIT), Sloan School of Management WP 4008-98., Massachusetts Institute of Technology (MIT), Sloan School of Management.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:4835. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

    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 references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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