The Private Costs of Patent Litigation
AbstractThis paper estimates the total cost of patent litigation to alleged infringers. We use a large sample of stock market event studies around the date of lawsuit filings for US public firms from 1984-99. We find that the total costs of litigation are much greater than legal fees and costs are large even for lawsuits that settle. Lawsuits cost alleged infringers about $28.7 million ($92) in the mean and $2.9 million in the median. Moreover, infringement risk rose sharply during the late 1990s to over 14% of R&D spending. Small firms have lower risk relative to R&D.
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Bibliographic InfoPaper provided by Research on Innovation in its series Working Papers with number 0701.
Date of creation: 2007
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-06-30 (All new papers)
- NEP-IND-2007-06-30 (Industrial Organization)
- NEP-INO-2007-06-30 (Innovation)
- NEP-IPR-2007-06-30 (Intellectual Property Rights)
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- James Bessen, 2006.
"The Value of U.S. Patents by Owner and Patent Characteristics,"
0603, Research on Innovation.
- Bessen, James, 2008. "The value of U.S. patents by owner and patent characteristics," Research Policy, Elsevier, vol. 37(5), pages 932-945, June.
- Katharine Rockett, 2009. "Property Rights and Invention," Economics Discussion Papers 663, University of Essex, Department of Economics.
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