Patent Thickets and the Market for Innovation: Evidence from Settlement of Patent Disputes

Alberto Galasso and Mark Schankerman

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: We study how fragmentation of patent rights ('patent thickets') and the formation of the Court of Appeal for the Federal Circuit (CAFC) affected the duration of patent disputes, and thus the speed of technology diffusion through licensing. We develop a model of patent litigation which predicts faster settlement agreements when patent rights are fragmented and when there is less uncertainty about court outcomes, as was associated with the 'pro-patent shift' of CAFC. The model also predicts that the impact of fragmentation on settlement duration should be smaller under CAFC. We confirm these predictions empirically using a dataset that covers nearly all patent suits in U.S. federal district courts during the period 1975-2000. Finally, we analyze how fragmentation affects total settlement delay, taking into account both reduction in duration per dispute and the increase in the number of required patent negotiations associated with patent thickets.

Keywords: patents; anti-commons; patent thickets; litigation; settlement (search for similar items in EconPapers)
JEL-codes: K41 L24 O31 O34 (search for similar items in EconPapers)
Date: 2008-08
New Economics Papers: this item is included in nep-com, nep-ino, nep-ipr, nep-pr~ and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://cep.lse.ac.uk/pubs/download/dp0889.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0889

Access Statistics for this paper

More papers in CEP Discussion Papers from Centre for Economic Performance, LSE
Bibliographic data for series maintained by ().