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Ligation and Settlement in Patent Infringement Case

Author

Listed:
  • Crampes, C.
  • Langinier, C.

Abstract

We investigate how intensive should be the monitoring effort and how the reaction of the patentholder may influence the entry decision. In a simultaneous game we show that even if the penalty paid by the infringer and the settlement cost are high, the patentholder may decide to choose a settlement instead of a trial. Furthermore, the likelihood of entry increases with the penalty for certain values of the parmeters. If monitoring expenditures and centry are sequential, whatever the decision order entry occurs less often than in the simultaneous setting.

Suggested Citation

  • Crampes, C. & Langinier, C., 2000. "Ligation and Settlement in Patent Infringement Case," Papers 00-537, Toulouse - GREMAQ.
    • Handle: RePEc:fth:gremaq:00-537
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    Cited by:

    1. Erika Färnstrand Damsgaard & Per Hjertstrand & Pehr‐Johan Norbäck & Lars Persson & Helder Vasconcelos, 2017. "Why Entrepreneurs Choose Risky R&D Projects – But Still Not Risky Enough," Economic Journal, Royal Economic Society, vol. 127(605), pages 164-199, October.

    More about this item

    Keywords

    MARKET ; DECISION MAKING ; GAMES;
    All these keywords.

    JEL classification:

    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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