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Intellectual Property Infringement by Foreign Firms: Import Protection through the ITC or Court

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  • James A. Brander
  • Barbara J. Spencer

Abstract

This paper examines intellectual property litigation as a method of protection from patent-infringing imports. Claims against patent-infringing imports entering the United States may be filed before the International Trade Commission (ITC) or in district court. The ITC applies injunctions (import prohibitions) that would seem to provide more protection from infringing imports than the standard license fee remedy in court. Settlements prior to legal adjudication are common in both venues. Using a model with Nash bargaining and Cournot competition, we show that an ITC filing may restrict imports by less than in court. This result tends to apply if product differentiation is high and the size of the patented cost-reducing innovation is large.

Suggested Citation

  • James A. Brander & Barbara J. Spencer, 2021. "Intellectual Property Infringement by Foreign Firms: Import Protection through the ITC or Court," NBER Working Papers 28496, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28496
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    More about this item

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • 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

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