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Enforcing Intellectual Property Rights

Author Info

  • Jean Olson Lanjouw
  • Mark Schankerman

Abstract

We study the determinants of patent suits and their outcomes over the period 1978-1999 by linking detailed information from the U.S. patent office, the federal court system, and industry sources. The probability of being involved in a suit is heterogeneous, being much higher for valuable patents and for patents owned by individuals and smaller firms. Thus the patent system generates incentives, net of expected enforcement costs, that differ across inventors. Patentees with a large portfolio of patents to trade, or having other characteristics that encourage "cooperative" interaction with disputants, more successfully avoid court actions. At the same time, key post-suit outcomes do not depend on observed characteristics. This is good news: advantages in settlement are exercised quickly, before extensive legal proceedings consume both court and firm resources. But it is bad news in that the more frequent involvement of smaller patentees in court actions is not offset by a more rapid resolution of their suits. However, our estimates of the heterogeneity in litigation risk can facilitate development of private patent litigation to mitigate this adverse effect of high enforcement costs.

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File URL: http://sticerd.lse.ac.uk/dps/ei/ei30.pdf
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Paper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Economics of Industry Papers with number 30.

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Date of creation: Dec 2001
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Handle: RePEc:cep:stieip:30
Contact details of provider: Web page: http://sticerd.lse.ac.uk/_new/publications/default.asp

Keywords: Parents; court actions; settement.;

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Find related papers by JEL classification:
  • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process

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  1. I.P.L. P'ng, 1983. "Strategic Behavior in Suit, Settlement, and Trial," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 539-550, Autumn.
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  9. Graham, Stuart J.H. & Hall, Bronwyn H. & Harhoff, Dietmar & Mowery, David C., 2002. "Post-Issue Patent “Quality Control:†A Comparative Study of US Patent Re-examinations and European Patent Oppositions," Competition Policy Center, Working Paper Series qt7931q79x, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
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  11. Joshua Lerner, 1994. "The Importance of Patent Scope: An Empirical Analysis," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 319-333, Summer.
  12. Lanjouw, Jean O & Schankerman, Mark, 2001. "Characteristics of Patent Litigation: A Window on Competition," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 129-51, Spring.
  13. Mark Schankerman, 1998. "How Valuable is Patent Protection? Estimates by Technology Field," RAND Journal of Economics, The RAND Corporation, vol. 29(1), pages 77-107, Spring.
  14. Lanjouw, Jean O & Pakes, Ariel & Putnam, Jonathan, 1998. "How to Count Patents and Value Intellectual Property: The Uses of Patent Renewal and Application Data," Journal of Industrial Economics, Wiley Blackwell, vol. 46(4), pages 405-32, December.
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  17. Hall, Bronwyn H & Ziedonis, Rosemarie Ham, 2001. "The Patent Paradox Revisited: An Empirical Study of Patenting in the U.S. Semiconductor Industry, 1979-1995," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 101-28, Spring.
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Cited by:

  1. Juranek, Steffen, 2015. "Investing in legal advice - What determines the costs of enforcing intellectual property rights?," Discussion Papers 2015/20, Department of Business and Management Science, Norwegian School of Economics.
  2. Bronwyn H. Hall & Stuart Graham & Dietmar Harhoff & David C. Mowery, 2004. "Prospects for Improving U.S. Patent Quality via Postgrant Opposition," NBER Chapters, in: Innovation Policy and the Economy, Volume 4, pages 115-144 National Bureau of Economic Research, Inc.
  3. Padraig Dixon & Christine Greenhalgh, 2003. "The Economics of Intellectual Property: A Review to Identify Themes for Future Research," Levine's Working Paper Archive 618897000000000645, David K. Levine.
  4. Bronwyn H. Hall, 2004. "Business Method Patents, Innovation, and Policy," Law and Economics 0401001, EconWPA.
  5. Julien Pénin, 2003. "Patents versus ex-post rewards : a new look," Cahiers de recherche du Département des sciences économiques, UQAM 20-19, Université du Québec à Montréal, Département des sciences économiques.
  6. Graham, Stuart J.H. & Harhoff, Dietmar, 2006. "Can Post-Grant Reviews Improve Patent System Design? A Twin Study of US and European Patents," CEPR Discussion Papers 5680, C.E.P.R. Discussion Papers.
  7. Patrick Cohendet & Matthieu Farcot & Julien Pénin, 2009. "Intellectual property in a knowledge-based economy : Patents to include vs. patents to exclude," Working Papers of BETA 2009-15, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.

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