The Value of Certainty in Intellectual Property Rights: Stock Market Reactions to Patent Litigation

No 82, Vassar College Department of Economics Working Paper Series from Vassar College Department of Economics

Abstract: Using a sample of patents litigated between 1977 and 1997, I estimate stock market reactions to patent litigation decisions and to patent grants. I find that the resolution of uncertainty over validity and infringement is worth as much to the firm as the initial patent right. Each is worth about 1 to 1.5% excess returns. Additionally, I find that there are significant differences pre and post-1982 with the establishment of the Court of Appeals for the Federal Circuit. I also find that there are significant differences in reactions for plaintiff patent-holders and defendant patent-holders. Interestingly, there is no similar effect for appellate court decisions relative to the district court. To my knowledge, this is the first study that measures the stock market reactions to legal outcomes of patent cases.

New Economics Papers: this item is included in nep-ino, nep-ipr, nep-knm and nep-law
Date: Written 2006-11
View list of references

Downloads: (external link)
http://irving.vassar.edu/VCEWP/VCEWP82.pdf (application/pdf)

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

Access Statistics for this paper

More papers in Vassar College Department of Economics Working Paper Series from Vassar College Department of Economics
Contact information at EDIRC.
Series data maintained by Sean Flynn ().