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The Private Costs of Patent Litigation

  • James Bessen


    (Research on Innovation, Boston University School of Law)

  • Michael J. Meurer

This paper estimates the total cost of patent litigation to alleged infringers. We use a large sample of stock market event studies around the date of lawsuit filings for US public firms from 1984-99. We find that the total costs of litigation are much greater than legal fees and costs are large even for lawsuits that settle. Lawsuits cost alleged infringers about $28.7 million ($92) in the mean and $2.9 million in the median. Moreover, infringement risk rose sharply during the late 1990s to over 14% of R&D spending. Small firms have lower risk relative to R&D.

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Paper provided by Research on Innovation in its series Working Papers with number 0701.

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Date of creation: 2007
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Handle: RePEc:roi:wpaper:0701
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