Media coverage and patent trolls: A study on US high-tech firms

Sayla Siddiqui and Syed Shams

Journal of Behavioral and Experimental Finance, 2023, vol. 37, issue C

Abstract: This paper investigates the impact of media coverage on a nonpracticing entity (NPE) patent litigation concerning the defendant firms. Using a sample of high-tech and patent-intensive firms from the US market between 2000 and 2020, we find that NPEs tend to target highly visible firms. This result is more pronounced when the firms are large and experience positive sentiment in the market. We ensure the causality of this relationship using the anti-troll law, which is targeted to curb the threat of NPE trolls, as a natural experiment and distance from the nearest news branch as an instrumental variable. We find that after suing the target firms, the return of the plaintiff, or the NPE firm, increases. Our results provide new insight into the effect of media coverage on firms’ litigation environment.

Keywords: Media; NPE litigation; Patent trolls; Anti-troll law (search for similar items in EconPapers)
JEL-codes: G34 K41 L82 O31 O32 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:37:y:2023:i:c:s2214635022001046

DOI: 10.1016/j.jbef.2022.100782

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