Patent validity and the timing of settlements

Talia Bar and Jesse Kalinowski

International Journal of Industrial Organization, 2019, vol. 67, issue C

Abstract: We study the timing of settlement in patent disputes, accounting for an alleged infringer’s search for evidence to challenge patent validity. Early settlements are more likely reached when the disputed patent has a low quality, and late settlements take place when the alleged infringer finds strong evidence that challenges patent validity. Thus, there is a tendency to settle disputes over patents that would have likely been invalidated in court. Fee shifting induces more early settlements, and when parties did not settle early, a higher expenditure on invalidating the patent. Our model sheds light on disputes involving patent assertion entities.

Keywords: Patent; Litigation; Infringement; Prior art; Fee shifting; America Invents Act (search for similar items in EconPapers)
JEL-codes: D83 O31 O34 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:67:y:2019:i:c:s0167718719300633

DOI: 10.1016/j.ijindorg.2019.102535

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