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Strategic patents and asymmetric litigation costs as entry deterrence instruments

Author

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  • Julio R. Robledo

    () (University of Vienna)

Abstract

To spur innovation, the patent protection system grants the patentee limited monopoly power to recoup his R&D investment, although, in general, allowing the use of the public good "innovation" is socially efficient. But patents and patent threats can also be used strategically, e.g. to deter entry from competitors. This note shows that, besides incumbency, the present patent protection system constitutes an additional strategic instrument that favors the incumbent, because asymmetric litigation costs may deter entry from potential rivals.

Suggested Citation

  • Julio R. Robledo, 2005. "Strategic patents and asymmetric litigation costs as entry deterrence instruments," Economics Bulletin, AccessEcon, vol. 15(2), pages 1-9.
  • Handle: RePEc:ebl:ecbull:eb-04o30005
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    References listed on IDEAS

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    Cited by:

    1. Capuano, Carlo & Grassi, Iacopo, 2018. "Patent Protection and Threat of Litigation in Oligopoly," EconStor Preprints 175243, ZBW - German National Library of Economics.
    2. Carlo Capuano & Iacopo Grassi, 2018. "Patent Protection and Threat of Litigation in Oligopoly," EERI Research Paper Series EERI RP 2018/03, Economics and Econometrics Research Institute (EERI), Brussels.

    More about this item

    Keywords

    Entry deterrence;

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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