Do Standard-Essential Patent Owners Behave Opportunistically? Evidence from U.S. District Court Dockets

Brian Love, Yassine Lefouili and Christian Helmers
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Brian Love: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Christian Helmers: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement

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Abstract: To what extent and with what effect do owners of standard-essential patents (SEPs) "hold-up" companies that produce standard-compliant products? To explore this question, we construct measures of opportunistic patent licensing behaviors using detailed information collected from the dockets of U.S. patent cases filed (2010-2019) to enforce SEPs and a matched sample of non-SEPs. Overall, we find evidence of opportunistic behavior by the patent enforcer in approximately 77% of SEP and 65% of non-SEP assertions in court. The figures mask important heterogeneity. There is significantly more opportunistic conduct aimed at increasing a potential licensee's loss if the patent enforcer prevails in court: 35% of SEP assertions vs. 10% of non-SEP assertions. In contrast, conduct that increases a potential licensee's litigation costs is less common and the difference between SEP assertions (8%) and non-SEP assertions (6%) is small. We also show that opportunistic behavior is associated with case outcomes, with the effect on settlement depending on the type of opportunistic behavior. Behavior that increases a potential licensee's litigation costs is associated with an increase in the probability of settlement, while behavior that increases a potential licensee's loss if the patent enforcer prevails in court is negatively associated with settlement.

Keywords: Litigation; Standards; Patents; Holdup; U.S (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-com, nep-ino, nep-ipr and nep-law
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Published in American Law and Economics Review, 2023, 25 (1), pp.300-337. ⟨10.1093/aler/ahad010⟩

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Journal Article: Do Standard-Essential Patent Owners Behave Opportunistically? Evidence From U.S. District Court Dockets (2023)
Working Paper: Do Standard-Essential Patent Owners Behave Opportunistically? Evidence from U.S. District Court Dockets (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04547832

DOI: 10.1093/aler/ahad010

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