Patent litigation and narrative R&D disclosures: Evidence from the adoption of anti-troll legislation

The last two decades have witnessed a sharp increase in patent litigation in the United States (U.S.), mainly driven by patent trolls. By exploiting the staggered adoption of Anti-Troll laws across 34 states as a plausible exogenous shock that reduces the risk of patent litigation by these trolls, we show that firms significantly increase their narrative R&D disclosures following the enactment of Anti-Troll laws. This effect is less pronounced in firms facing higher competitive pressure, and more pronounced in firms that are more exposed to threats from patent trolls. Further analyses alleviate the concern that the impact of Anti-Troll laws on disclosures is attributable to state-level economic or policy changes. Our results highlight the significant role of patent troll litigation in influencing the dissemination of narrative R&D information.