Economic Consequences of a Changing Litigation Environment: The Case of Patents
A model of patent infringement is developed to analyze the relationship between litigation and aspects of the legal environment such as the probability that the patent is found valid, the size of legal fees and their allocation across agents. Potential challengers first decide whether to infringe and then the patentee decides whether or not to prosecute. The outcome of this game has a fundamental impact on the value of patent protection to a patentee. This model is then linked to a patent renewal model which explicitly incorporates the legal parameters of interest from the litigation game. Estimates of the renewal model allow the empirical estimation of the private value of a patent protection. Simulations are presented for Germany which show the quantitative impact of changes in the legal environment on the value generated by the patent system and hence the incentives created for innovation.
|Date of creation:||Aug 1994|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
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.:
- Kathryn E. Spier, 1994. "Pretrial Bargaining and the Design of Fee-Shifting Rules," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 197-214, Summer.
- Simon Kuznets, 1962. "Inventive Activity: Problems of Definition and Measurement," NBER Chapters,in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 19-52 National Bureau of Economic Research, Inc.
- Stanley M. Besen & Leo J. Raskind, 1991. "An Introduction to the Law and Economics of Intellectual Property," Journal of Economic Perspectives, American Economic Association, vol. 5(1), pages 3-27, Winter.
- Pakes, Ariel & Schankerman, Mark A., 1978.
"The Rate of Obsolescence of Knowledge, Research Gestation Labs, and the Private Rate of Return to Research Resources,"
78-13, C.V. Starr Center for Applied Economics, New York University.
- Ariel Pakes & Mark Schankerman, 1979. "The Rate of Obsolescence Of Knowledge, Research Gestation Lags, and the Private Rate of Return to Research Resources," NBER Working Papers 0346, National Bureau of Economic Research, Inc.
- Pakes, Ariel S, 1986. "Patents as Options: Some Estimates of the Value of Holding European Patent Stocks," Econometrica, Econometric Society, vol. 54(4), pages 755-784, July.
- Ariel Pakes, 1984. "Patents as Options: Some Estimates of the Value of Holding European Patent Stocks," NBER Working Papers 1340, National Bureau of Economic Research, Inc.
- Edwin Mansfield, 1986. "Patents and Innovation: An Empirical Study," Management Science, INFORMS, vol. 32(2), pages 173-181, February.
- Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, vol. 27(2), pages 253-279, August.
- David Kreps & Robert Wilson, 1999. "Reputation and Imperfect Information," Levine's Working Paper Archive 238, David K. Levine.
- Jean Olson Lanjouw, 1993. "Patent Protection: Of What Value and for How Long?," NBER Working Papers 4475, National Bureau of Economic Research, Inc.
- Glenn C. Loury, 1979. "Market Structure and Innovation," The Quarterly Journal of Economics, Oxford University Press, vol. 93(3), pages 395-410.
- Glenn C. Loury, 1976. "Market Structure and Innovation," Discussion Papers 256, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Claude d'Aspremont & Alexis Jacquemin & Jean Jaskold Gabszewicz & John A. Weymark, 1983. "On the Stability of Collusive Price Leadership," Canadian Journal of Economics, Canadian Economics Association, vol. 16(1), pages 17-25, February.
- d'ASPREMONT, Claude & JACQUEMIN, Alexis & GABSZEWICZ, Jean J. & WEYMARK, John A., "undated". "On the stability of collusive price leadership," CORE Discussion Papers RP 522, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Jean Olson Lanjouw, 1992. "Under threat: potential competition, litigation and the private value of patent protection," LSE Research Online Documents on Economics 6777, London School of Economics and Political Science, LSE Library.
- Jean Olson Lanjouw, 1992. "Under Threat: Potential Competition, Litigation and the Private Value of Patent Protection," STICERD - Economics of Industry Papers 06, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Cooter, Robert D & Rubinfeld, Daniel L, 1989. "Economic Analysis of Legal Disputes and Their Resolution," Journal of Economic Literature, American Economic Association, vol. 27(3), pages 1067-1097, September.
- Reinganum, Jennifer F., 1989. "The timing of innovation: Research, development, and diffusion," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 1, chapter 14, pages 849-908 Elsevier.
- Sullivan, Richard J, 1994. "Estimates of the Value of Patent Rights in Great Britain and Ireland, 1852-1876," Economica, London School of Economics and Political Science, vol. 61(241), pages 37-58, February.
- Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3), pages 783-832.
- Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1988. "Appropriating the Returns from Industrial R&D," Cowles Foundation Discussion Papers 862, Cowles Foundation for Research in Economics, Yale University. Full references (including those not matched with items on IDEAS)