Financing And The Protection Of Innovators
The protection that innovators obtain through intellectual property rights crucially depends on their incentives and ability to litigate infringers. Taking patents as a notable example, we study how the financing of legal costs can alter the incentives to litigate in defense of a petent and, thus, the prospects of infrigement and the effective protection of the innovator. We compare the resort to a financier once the infrigement has occurred (ex-post financing) with patent litigation insurance (PLI) as well as other ex-ante arrangements based on leverage. We show that the ex-ante arrangements can be designed (for instance, in the case of PLI, by including an appropiate deductible) so as to implement the innovator's second-best outcome: a situation in which patent predaction is deterred without inducing excessive litigation.
|Date of creation:||Feb 2005|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.cemfi.es/
More information through EDIRC
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.:
- Stephen Maurer & Suzanne Scotchmer, .
"Profit Neutrality in Licensing: The Boundary Between Antitrust Law and Patent Law,"
American Law & Economics Association Annual Meetings
1090, American Law & Economics Association.
- Stephen M. Maurer & Suzanne Scotchmer, 2006. "Profit Neutrality in Licensing: The Boundary Between Antitrust Law and Patent Law," American Law and Economics Review, Oxford University Press, vol. 8(3), pages 476-522.
- Maurer, Stephen M. & Scotchmer, Suzanne, 2004. "Profit Neutrality in Licensing: The Boundary Between Antitrust Law and Patent Law," Competition Policy Center, Working Paper Series qt6f659351, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Stephen M. Maurer & Suzanne Scotchmer, 2004. "Profit Neutrality in Licensing: The Boundary Between Antitrust Law and Patent Law," Law and Economics 0407001, EconWPA.
- Stephen M. Maurer & Suzanne Scotchmer, 2004. "Profit Neutrality in Licensing: The Boundary between Antitrust Law and Patent Law," NBER Working Papers 10546, National Bureau of Economic Research, Inc.
- Lucian Arye Bebchuk & Howard F. Chang, 1994.
"An Analysis of Fee-Shifting Based on the Margin of Victory: On FrivolousSuits, Meritorious Suits and the Role of Rule 11,"
NBER Working Papers
4731, National Bureau of Economic Research, Inc.
- Bebchuk, Lucian Arye & Chang, Howard F, 1996. "An Analysis of Fee Shifting Based on the Margin of Victory: On Frivolous Suits, Meritorious Suits, and the Role of Rule 11," The Journal of Legal Studies, University of Chicago Press, vol. 25(2), pages 371-403, June.
- Lanjouw, Jean O & Schankerman, Mark, 2004. "Protecting Intellectual Property Rights: Are Small Firms Handicapped?," Journal of Law and Economics, University of Chicago Press, vol. 47(1), pages 45-74, April.
- Perotti, Enrico C & Spier, Kathryn E, 1993.
"Capital Structure as a Bargaining Tool: The Role of Leverage in Contract Renegotiation,"
American Economic Review,
American Economic Association, vol. 83(5), pages 1131-41, December.
- Perotti, E.C. & Spier, K.E., 1991. "Capital Structure As A Bargaining Tool: The Role Of Leverage In Contract Renegociation," Harvard Institute of Economic Research Working Papers 1548, Harvard - Institute of Economic Research.
- Choi, Jay Pil, 1998.
"Patent Litigation as an Information-Transmission Mechanism,"
American Economic Review,
American Economic Association, vol. 88(5), pages 1249-63, December.
- Choi, J.P., 1997. "Patent Litigation as an Information Transmission Mechanism," Discussion Paper 1997-17, Tilburg University, Center for Economic Research.
- Reiko Aoki & Jin-Li Hu, 1999. "Licensing vs. Litigation: The Effect of the Legal System on Incentives to Innovate," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 8(1), pages 133-160, 03.
- Claude Crampes & Corinne Langinier, 2002.
"Litigation and Settlement in Patent Infringement Cases,"
RAND Journal of Economics,
The RAND Corporation, vol. 33(2), pages 258-274, Summer.
- Crampes, Claude & Langinier, Corinne, 2002. "Litigation and Settlement in Patent Infringement Cases," Staff General Research Papers 5231, Iowa State University, Department of Economics.
- Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
- Lerner, Josh, 1995. "Patenting in the Shadow of Competitors," Journal of Law and Economics, University of Chicago Press, vol. 38(2), pages 463-95, October.
- David Kreps & Robert Wilson, 1999.
"Reputation and Imperfect Information,"
Levine's Working Paper Archive
238, David K. Levine.
- Vojislav Maksimovic, 1988. "Capital Structure in Repeated Oligopolies," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 389-407, Autumn.
- Llobet, Gerard, 2003. "Patent litigation when innovation is cumulative," International Journal of Industrial Organization, Elsevier, vol. 21(8), pages 1135-1157, October.
- Bolton, Patrick & Scharfstein, David S, 1990. "A Theory of Predation Based on Agency Problems in Financial Contracting," American Economic Review, American Economic Association, vol. 80(1), pages 93-106, March.
When requesting a correction, please mention this item's handle: RePEc:cmf:wpaper:wp2005_0502. 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: (Araceli Requerey)
If references are entirely missing, you can add them using this form.